Ball Co. incurred research and development costs in 2004 as follows: Materials u

Question

Ball Co. incurred research and development costs in 2004 as follows:

Materials used in research and development project 540,000

Equipment acquired that will have alternate future uses in future research and development project 4,600,000

Depreciation for 2004 on aove equipment 360000

personnel costs of persons involoved in research and development projects 660000

consulting fees paid to outsiders for research and development projects 180000

indirect costs resonably allocable to research and development projects 270000

Total 6610000

the amount of research and development costs charged to Ball's 2004 income statement should be:

a. 1560000

b. 1740000

c. 1010000

d none of above

Explanation / Answer

d. none of above

direct materials =540000

personnel cost = 660000

consultibng fee paid to uut siders = 180000

indirect costs = 270000

depreciation = 360000

= 540000+360000+660000+180000+270000 = 2010000.

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