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Question - Identifying Research and Development Costs - Determine whether the following items would be classified in the financial statements of Jackson Co. as research and development expense or operating expense.
Item
Amount
Classification
1. Salaries of employees working on the modification of a product design
$45,000
Research and development expenseOperating expense
2. Cost of materials used during work on the modification of a product design
5,000
3. Salaries of employees working on the improvement of an existing product
60,000
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