Software Development Costs Are Treated the Same Way as Research

question 50

True/False

Software development costs are treated the same way as research and development costs under GAAP (Generally Accepted Accounting Principles).

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Definitions:

Total Factory Overhead Costs

The sum of all indirect costs incurred during the production process, not directly associated with the production of specific goods or services.

Compute

To calculate or determine by mathematical methods.

Month

A period of time, typically used as a basic time unit for planning and accounting, roughly based on the natural period related to the motion of the Moon.

Cost of Goods Manufactured

The total production cost of goods that are completed in a specific accounting period, including costs of materials, labor, and overhead attributable to the production process.