Martinez Company incurred the following costs during 2012 in connection with its research and development activities.
Cost of equipment acquired that will have alternative
uses in future R&D projects over the next 5 years
(uses straight-line depreciation) ...............$330,000
Materials consumed in R&D projects .............59,000
Consulting fees paid to outsiders for R&D projects .......100,000
Personnel costs of persons involved in R&D projects .......128,000
Indirect costs reasonably allocable to R&D projects ........50,000
Materials purchased for future R&D projects ..........34,000
Instructions
Compute the amount to be reported as research and development expense by Martinez on its income statement for 2012. Assume equipment is purchased at the beginning of the year.