Research and Development Costs
In 2008, the Slidell Corporation incurred research and development costs as follows:
|
Materials and equipment |
$160,000 |
|
Personnel |
105,000 |
|
Indirect costs |
60,000 |
|
|
$325,000 |
These costs relate to a product that will be marketed in 2009. It is estimated that these costs will be recouped by December 31, 2012.
1. What is the amount of research and development costs that should be expensed in
2008?
2. Assume that of these costs, equipment of $80,000 can be used on other research projects. Estimated useful life of the equipment is five years with no salvage value, and it was acquired at the beginning of 2008. What is the amount of research and development costs that should be expensed in 2008 under these conditions? Assume that depreciation on all equipment is computed on a straight line basis.