Which of the following would be considered research and development costs?
A) Routine efforts to refine an existing product.
B) Periodic alterations to existing production lines.
C) Marketing research to promote a new product.
D) Construction of prototypes.

Question

Quizplus · Accepted Answer

Research and development costs typically involve the creation of new products or processes, or significant improvements to existing products or processes. Construction of prototypes falls under this category, as it involves the development of new products or improvements to existing products. Routine efforts to refine an existing product (A) and periodic alterations to production lines (B) would be considered ongoing operating expenses. Marketing research (C) is also not considered a research and development cost, as it is primarily focused on promoting and selling an existing or newly developed product.

Which of the Following Would Be Considered Research and Development