Richard Co. incurred research and development costs in 2011 as follows:
|Equipment acquired for use in various research and development projects||$500,000|
|Depreciation on the above equipment||$67,500|
|Compensation costs of personnel||$250,000|
|Outside consulting fees||$75,000|
|Indirect costs appropriately allocated||$125,000|
The total research and development costs in Richard's 2011 income statement should be:
Sunk cost can be defined as the expense which is incurred due at the beginning which is not recoverable. The expense incurred by a company on research and development is an example of sunk cost.
Answer and Explanation: 1
Equipment acquired for use in various R&D projects = $500,000
Depreciation on the above equipment = $67,500
Materials used = $100,000
See full answer below.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 31 / Lesson 8
Sunk costs refer to incurred costs that can no longer be recovered. Learn more about the definition of sunk costs and explore examples of sunk costs in businesses.