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During the current year, Orr Company incurred the following costs:
Research and development services performed by Key Corp. for Orr
$
150,000
Design, construction, and testing of preproduction prototypes and models
200,000
Testing in search for new products or process alternatives
175,000
In its income statement for the current year, what amount should Orr report as research and development expense?
$150,000$350,000$200,000$525,000
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