Stage 6 · The cost of one product
CAS-18: Research and Development Costs
A sharper collar that worked and a sportswear line that didn’t. Which experiments belong in the cost of a uniform?
What you will learn in CAS-18
- Research, development and R&D cost (§§4, 5)
- Where each kind of R&D goes (§§6, 7.2)
- Abandoned projects and disclosures (§8)
Chapters
- Two experiments · Count what the collar project really used (§§4, 5.1, 5.2, 5.7)
- Where does each experiment go? · The winner goes into the uniform; the rest stay out (§§6.1, 6.2, 6.4, 7.2, 8.1)
- Spot the mistakes in the R&D statement · Three mistakes are hiding (§§5.1, 6.1, 8.1)
Key terms
- Research and development cost (§§4, 5.1, 5.2, 5.7): Research: planned investigation to learn something new. Development: using it to make new or much better materials, products or processes before selling them. R&D cost covers materials, people, services and equipment used, but not general administration.
- Where R&D cost goes (§§6.1, 6.2, 6.4, 7.2, 8.1): Improving an existing product or process: cost of production. Development that creates a new asset: spread over its use. R&D that cannot be linked to products: outside product cost, in the reconciliation. Abandoned projects: shown as unusual.
Common questions
Is R&D part of the cost of production?
R&D for improving existing products or processes is (para 6.4). R&D that cannot be attributed to products is excluded from product cost (para 6.1).
CAS-18, Research and Development Costs. Checked against the standard in November 2026. Selvi Garments, the school order and every figure in this lesson are fictional. Read the official text on the ICMAI Cost Accounting Standards page ↗ before applying it to real work.