Cullumber Company incurred the following costs during the current year in connec

Question

Cullumber Company incurred the following costs during the current year in connection with its research and development activities.

Compute the amount to be reported as research and development expense by Cullumber on its current year income statement. Assume equipment is purchased at the beginning of the year.

Cost of equipment acquired that will have alternative    uses in future R&D projects over the next 5 years    (uses straight-line depreciation) $286,500 Materials consumed in R&D projects 56,300 Consulting fees paid to outsiders for R&D projects 123,000 Personnel costs of persons involved in R&D projects 139,000 Indirect costs reasonably allocable to R&D projects 46,300 Materials purchased for future R&D projects 33,300

Explanation / Answer

Materials consumed in R&D projects 56,300 consulting fees paid to outsiders 123,000 personnel cost of persons involved in R&D projects 139,000 indirect cost resonably allocated to R&D project 139,000 depreciation expense (286500/5) 57300 total to be expensed for reasearch and development 514,600 answer

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