We developed our own engine and assets. We started with a basic dialogue system, then built upon that to create BODVII, then built upon that to create CSTW. So it's sort of an evolving engine. However, if you want distinct numbers, BODVII took relatively few months (3) to develop (two person team; coder/writer and artist/mapper), though we had a lot of the engine started and most of the concepts laid out already. CSTW built upon the BOD engine, but the game took roughly 8 months to develop (three person team). We took several months extra to add additional content to CSTW and to port the games to the PC.
Expenses are relatively low if you can find the right team members and try to keep your expenses in line. XNA is a free Microsoft tool, and Xblig requires a $100/year membership. Those are the basic costs. Team members at Zeboyd split net revenue rather than pay salaries, though right now we are proceeding with contracting our musician. But if you have an eager, responsible team with the tools they need to do their parts, you can keep costs relatively low. That is part of how we approach development.