Choice "D" is correct. All relevant costs incurred before technological feasibility is established should be expensed as research and development expenditures. After technological feasibility is established, all relevant costs are capitalized until the product is released for sale. At that point all relevant costs are included in "Inventory" (normal product costs) and charged to "Cost of Goods Sold" when sold.
Choices "c", "b", and "a" are incorrect per the above explanation.
