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Exercise 13-3 RESEARCH AND DEVELOPMENT ** Because of the low level of rainfall in Simonstown, householders find it difficult to keep their gardens and lawns
Exercise 13-3 RESEARCH AND DEVELOPMENT ** Because of the low level of rainfall in Simonstown, householders find it difficult to keep their gardens and lawns sufficiently watered. As a result, many householders have installed bores that allow them to access underground water suitable for using on the garden. This is a cheaper option than incurring excess water bills by using the government- provided water system. One of the problems with much of the bore water is that its heavy iron content leaves a brown stain on paths and garden edges. This can make homes look unsightly and lower their value. Noting this problem, Strand Laboratories believed that it should research the problem with the goal of developing a filter system that could be attached to a bore and remove the effects of the iron content in the water. This process, if developed, could be patented and filters sold through local reticulation shops. In 2011, Strand commenced its work on the problem, resulting in August 2015 in a patent for the NoMoreIron filter process. Costs incurred in this process were as shown below. 201112 Research conducted to develop filter 125 000 201213 Research conducted to develop filter 132 000 2013-14 Design and construction of prototype 152 000 2014-15 Testing of models 51 000 2015-16 Fees for preparing patent application 12 000 2016-17 Research to modify design 34 000 2017-18 Legal fees to protect patent against cheap copies 15 000 Required Discuss how the company should account for each of these outlays
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