During the year, the company developed a new piece of exercise equipment that has a built-in video game. It was the policy to amortize development costs on a straight-line basis over three years, with 50% of the normal amount in the year of development. The costs associated with product development included:

Costs to determine how a video game would work with exercise equipment		$50,000
Design, testing, and construction of prototype equipment		350,000
Costs to determine the best production process for the new equipment		40,000
Advertising costs to alert customers about the new product		47,000

Required: Determine whether each expenditure is clearly a research cost or can potentially be a development cost (if the six criteria are met at the point when the costs are incurred). Known that company uses ASPE

Instruction: Place the dollar amount of the amount of each expenditure in the research or development cost box.

	Research and other expenses	Potentially Development
Costs to determine how a video game would work with exercise equipment
Design, testing, and construction of prototype equipment
Costs to determine the best production process for the new equipment
Advertising costs to alert customers about the new product