Frye Company incurred research and development costs in 2007 as follows:
|
Equipment acquired for use in research and development projects |
$1,000,000 |
|
Depreciation on the equipment |
150,000 |
|
Materials used |
200,000 |
|
Compensation costs of personnel |
500,000 |
|
Outside consulting fees |
100,000 |
|
Indirect costs appropriately allocated |
250,000 |
The total research and development costs charged in Frye’s 2007 income statement should be
a. $650,000
b. $900,000
c. $1,200,000
d. $1,800,000