During the current year, Orr Company incurred the following costs
Research and development services performed by Key Crop, for Orr......................$1, 50,000
Design, construction, and testing of preproduction prototypes and models...............2, 00,000
Testing in search for new products or process alternatives.........................................1, 75,000
In its income statement for the current year, what amount should Orr report as research and development expense?
a. $150000
b. $200000
c. $350000
d. $525000