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faltersainse [42]
3 years ago
8

Bio-Lab Pharmaceuticals carried on a project to develop a new drug that dramatically shortened the recovery period for flu infec

tion. The project cost the company $150,000 before Bio-Lab abandoned the project due to the slim possibility to gain FDA approval. Bio-Lab then spent $300,000 on another project developing a kind of shot that achieves the same goal for flu recovery, and the company is confident in gaining FDA approval for the new shot and in making profits out of the shot. What amount would be expensed
Business
1 answer:
Gala2k [10]3 years ago
4 0

Answer:

$450,000

Explanation:

Calculation for the amount that would be expensed

Using this formula

Amount to be expensed = Project cost before the project was abandoned + Amount spent on another project

Let plug in the formula

Amount to be expensed =$150,000+$300,000

Amount to be expensed =$450,000

Therefore the amount that would be expensed will be $450,000

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b.

Contribution margin income statement consider all the variable expenses as cost of product cost and calculates the contribution margin, after that the fixed costs are deducted calculate the net income.

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