CMA Pop Quiz #146: Planning, Budgeting, and Forecasting

Here is the answer to this week’s quiz:

All of the following are part of a capital investment budget except:

A. Factory machine purchase price.
B. Cost of disposing of the old machine being replaced.
C. Installation of the factory machine.
D. Research and development costs.

Correct Answer D

Research and development costs are period costs that must be expensed in the period incurred and are therefore not part of a capital budget.


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