Research And Development Costs Flashcards, test questions and answers
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What is Research And Development Costs?
Research and development (R) costs are the expenses incurred when a company seeks to develop new products or services, enhance existing ones, or make improvements in production processes. R costs can include everything from salaries for research staff to laboratory supplies and equipment.The main purpose of R is to create new products or services that bring value to customers. Companies typically invest in R because they believe it will lead to higher profits in the future. By understanding customer needs and developing innovative solutions, companies can stay ahead of their competition and remain competitive.R costs can be significant for companies that are committed to innovation. Companies must allocate funds not only for research personnel, but also for materials and supplies used during experiments as well as marketing activities associated with launching their new product or service. Additionally, if a patent is involved with the project, there will be additional legal fees associated with obtaining the patent rights all of which can add up quickly in terms of total expenses incurred. However, even though there are significant costs associated with engaging in R activities, companies often find that it pays off over time as they gain access to more advanced technologies and processes that help them stay ahead of their competitors. This could result in increased sales due to improved offerings compared with their competitors’ products or services. In addition, investing in R&D may also help attract high-quality employees who have specialized skillsets relevant to the improvement of existing products or development of new ones which could further contribute towards a company’s growth over time.