EXPLAIN: (i) Pre-production Costs (ii) Research and Development Costs (iii) Training Costs

(i) Pre-production Costs: These costs forms the part of development cost, incurred in making a trial production run, preliminary to formal production. These costs are incurred when a new factory is in the process of establishment or a new project is undertaken or a new product line or product is taken up, but there is no established or formal production to which such costs may be charged. (ii) Research and Development Costs: Research costs are the costs incurred for the original and planned investigation undertaken with a prospect of gaining new scientific or technical knowledge and understanding. Development costs are the cost incurred in applying research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services prior to the commencement of commercial production or use. (iii) Training Costs: Costs which are incurred in and in relation to providing training to the workers, apprentices, executives etc. Training cost consists of wages and salaries paid to new trainees, fees paid to trainers, cost of materials and properties used to train the trainees, costs associated with training centre, loss suffered due to lower production and extra spoilage etc. The total cost of training section is thereafter apportioned to production centers.