Complete Question:
Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:
Research for New Design $2.4M
DVMPT of New Product $1.3M
Patent Filing Fees $52K
The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2018 fiscal year. What amount should Pribuss expense in its 2018 income statement related to the above expenditures?
Answer:
The Research expenses of $2.4M that are written as expense in the Income statement and the Development costs of $1.3M and patent legal fees of $53k are capitalized.
Explanation:
The reason is that the International Standard IAS 38 Intangible Assets says that the expenditure incurred on the research that hasn't entered development phase must be written as expense in the year and the expenditure incurred on the development phase of the research outcomes must be capitalized to the extent it is ready for use. In this case $1.3M is clearly a development cost and patent legal fees of $53k is the expenditure that will prepare the asset and making it ready for use, so it must also be capitalized.
Answer:
The proportion of each payment that represents interest versus repayment of principal would be higher if the interest rate were higher
Explanation:
Amount of interest component in a loan instalment will be higher as compared with principal amount in the initial period of repayment . As period lapses , interest amount reduces progressively and principal amount increases . When the tenure of loan is increased , proportion of interest increases in an instalment .
When economists refer to "demand," they are speaking of<u> a schedule of amounts of a product that buyers would purchase at alternative prices in a given time period.</u>
Answer to a:
The number of years for which the deposits will be made is given by:
= Retirement age - current age
= 65 - 23
= 42 years
Answer:
unitary absorption production cost= $128
Explanation:
The a<u>bsorption costing method</u> includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
<u>First, we need to calculate the unitary fixed manufacturing overhead:</u>
<u></u>
Unitary fixed overhead= 441,000 / 7,000= $63
<u>Now, the unitary absorption production cost:</u>
unitary absorption production cost= 51 + 12 + 2 + 63
unitary absorption production cost= $128
