Research and development cost for Herald Corporation for the year ended December 31, 2018:Project A - Expected total revenues P7,000,000, starting in early 2018. Expected total costs will beP5,000,000. Costs incurred to date, all in 2019, are P2,200,000.Project B - Expected total revenues P6,000,000. Costs incurred to date are P3,500,000. Expectedtotal costs are P4,500,000. The commencement of commercial sales is uncertain due to problems inraising funds to cover the final development costs.Project C - Expected total revenues, P3,500,000 with P1,000,000 of revenue already earned in 2018.Total development costs incurred, all in 2018, were P3,800,000.Research projects. Total costs spend in 2018 were P1,500,000.What total amount should be charged against income in 2018 related to the research anddevelopment costs?

The total cost of production of a good comprises of the total fixed cost of production and the total…

Answered: Project A - Expected P5,000,000. Costs…

Business

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Project A - Expected P5,000,000. Costs in

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Research and development cost for Herald Corporation for the year ended December 31, 2018:
Project A - Expected total revenues P7,000,000, starting in early 2018. Expected total costs will be
P5,000,000. Costs incurred to date, all in 2019, are P2,200,000.
Project B - Expected total revenues P6,000,000. Costs incurred to date are P3,500,000. Expected
total costs are P4,500,000. The commencement of commercial sales is uncertain due to problems in
raising funds to cover the final development costs.
Project C - Expected total revenues, P3,500,000 with P1,000,000 of revenue already earned in 2018.
Total development costs incurred, all in 2018, were P3,800,000.
Research projects. Total costs spend in 2018 were P1,500,000.
What total amount should be charged against income in 2018 related to the research and
development costs?

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