Choice "D" is correct. Under U.S. GAAP, R&D contracted out to a third party, preproduction prototypes and models costs, and, costs for searching for new products or new process alternatives are reported as R&D expense.
Choice "a" is incorrect. R&D expense should include the preproduction prototypes and models costs and the costs of searching for new products or new process alternatives.
Choice "c" is incorrect. R&D expense should include the costs incurred through contracting with a third party for the R&D work to be done and the costs of searching for new product or new process alternatives.
Choice "b" is incorrect. R&D expense should include the costs for searching for new products or new process alternatives.