Final answer:
In accounting for costs of defending a patent lawsuit, the costs should be capitalized and amortized over the remaining estimated useful life of the patent (option b).
Step-by-step explanation:
When a company incurs costs in defending a patent suit, the generally accepted accounting practices dictate how these costs should be accounted for in the financial statements. The proper treatment is option b, which is to capitalize the cost and amortize it over the remaining estimated useful life of the patent. This means that the cost is treated as an asset and is expensed gradually as the patent contributes to the company's revenue generation, aligning the cost with the benefits it produces.
Charging the cost off in the current period or adding it to factory overhead would not be appropriate as these costs provide future economic benefits and are directly associated with the patent's ability to generate revenue.