1. Morning Glory incurred research and development costs in 20X1 as follows. MOR

Question

1. Morning Glory incurred research and development costs in 20X1 as follows. MORNING GLORY RESEARCH AND DEVELOPMENT COSTS FOR YEAR 20X1 Equipment acquired for use in research and development projects Depreciation on the above equipment Materials used Compensation costs of personnel Outside consulting fees Indirect costs appropriately allocated S 1,000,000 150,000 200,000 500,000 100,000 250,000 The total research and development costs charged (as expense) in Morning Glory's 20X1 income statement should be: (a) 650,000. (b) $ 900,000. (c) $1,200,000. (d) $1,800,000.

Explanation / Answer

Solution:-

(c) $1,200,000.

Explanation:-

The amount of research and development costs charged to Glory's income statement should be =

$150,000 + $200,000 + $500,000 + $100,000 + $250,000 = $ 1,200,000.

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