Research and Development Costs

Danielson Inc. incurred the following costs during 2016:

Required:

1. Which of the following are included in R&D costs of the current period?

a.	current-period depreciation expense on the building housing the R&D activities	Research and development
b.	cost of a market research study	Not research and development
c.	current-period depreciation expense on a machine used in multiple R&D activities	Research and development
d.	salary of the director of R&D	Research and development
e.	salary of the vice president who spends one-third of her time overseeing the R&D activities	Research and development
f.	pension costs for the salaries in Items d and e	Research and development

2. R&D is expensed as incurred because:

1. There is a high degree of uncertainty about which R&D projects will produce benefits and which will not.
2. It's easier to implement.
3. Expensing all R&D results in greater comparability between companies.