Briggs Company was started when it acquired $$150,000$ by issuing common stock. During the first year of operations, the company incurred specifically identifiable product costs $($materials$,$ labor, and overhead$)$ amounting to $$120,000.$ Briggs also incurred $$20,000$ of product development costs. There was a debate regarding how the product development costs should be classified. Advocates of Option $1$ believed that the costs should be included in the selling, general, and administrative cost category. Advocates of Option $2$ believed it would be more appropriate to classify the product development costs as product costs. During the first year, Briggs made $10,000$ units of product and sold $8,000$ units at a price of $$20$ each. All transactions were cash transactions.