Innovative Incorporated has recently designed and developed its own payroll system for use in its own business. If there is a market the company may also decide to sell it to outside companies. Work on this project was completed over an 18- month period. The following costs were incurred in development of the software:

Conceptual design work................. $ 3,200

Evaluation and decision on alternative options.......... 4,100

Evaluation and consideration software requirements for options.. 9,500

Final selection of option................. 2,300

Software design work .................50,000

Software coding .....................28,000

Testing of software ....................12,000

Data conversion costs information from old system ......8,300

Staff training on new software............... 2,100

Allocation variable overhead costs ............5,500

Allocation general and administrative costs......... 8,800

Ongoing software maintenance.............. 4,500

Required:

1. Indicate how much would be accounted for as an intangible asset for software. Explain why a cost is included or not included.

2. Are software costs always classified as an intangible asset? Explain why or why not.