During 2015, Leon Co. incurred the following costs:

Testing in search for process alternatives $ 350,000

Costs of marketing research for new product $ 250,000

Modification of the formulation of a process $ 560,000

Research and development services performed by Beck Corp. for Leon $ 475,000

In Leon's 2015 income statement, research and development expense should be

a. $560,000.

b. $1,035,000.

c. $1,385,000.

d. $1,635,000.