Reference no: EM132724795
Question - Ward Company incurred research and development costs in 2000 as follows:
Equipment acquired for use in various research and development projects P975,000
Depreciation on the above equipment 135,000
Materials used 200,000
Compensation costs of personnel 500,000
Outside consulting fees 150,000
Indirect costs appropriately allocated 250,000
Modification to the formulation of a chemical product 140,000
Trouble-shooting in connection with break-downs and quality control during commercial production 150,000
Design of tools, jigs, molds and dies involving new technology 170,000
Seasonal or routine or other periodic design changes to existing products 185,000
Laboratory research aimed at discover of new technology 215,000
Required -
1. Find the total research and development costs charged to expenses in Ward's 2000 income statement?
(a) P850,000 (b) P1,235,000 (c) P1,1760,000 (d) P1,825,000
2. Find the total amount charged to other operating expenses in Ward's 2000 income statement?
(a) P335,000 (b) P675,000 (c) P755,000 (d) P850,000