Question

Crane Co. incurred research and development costs in 2021 as follows: Materials used in research and development projects $ 945000 Equipment acquired that will have alternate future uses in future research and development projects 2950000 Depreciation for 2021 on above equipment 491666 Personnel costs of persons involved in research and development projects 745000 Consulting fees paid to outsiders for research and development projects 295000 Indirect costs reasonably allocable to research and development projects 220000 $5646666 The amount of research and development costs charged to Crane's 2021 income statement should be

Answer 1

The amount of research and development costs charged to Crane's 2021 income statement = $2,696,666

Step-by-step explanation:

Materials used in research and development projects = $945,000

Equipment acquired that will have alternate future uses in future research and development projects = $2,950,000

Depreciation = $491,666

Personnel costs = $745,000

Consulting fees = $295,000

Indirect costs = $220,000

The amount of research and development costs charged to Crane's 2021 income statement would be:

Materials used + Depreciation for 2021 + Personnel costs + Consulting fees + Indirect costs

= $945,000 + $491,666 + $745,000 + $295,000 + $220,000

= $2,696,666

Therefore, the amount of research and development costs charged to Crane's 2021 income statement =$2,696,666