I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

QUESTION 

Research and development

 

Y Co is a company which specialises in developing new materials and manufacturing processes for the 

furniture industry. The company receives payments from a variety of manufacturers, which pay for the 

right to use the company's patented fabrics and processes. 

R&D costs for the year ended 30 September 20X5 can be analysed as follows. 

 

 $     

Current projects: 

Project A 

 280,000

New flame-proof padding. Expected to cost a total of $400,000 to complete 

development. Expected total revenue $2,000,000 once work completed – probably 

late 20X6. Customers already placed advance orders for the material after seeing 

demonstrations of its capabilities earlier in the year.