Organic Laboratories allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments: Facility location Kentucky Arizona Illinois Total New product revenue $ 86,000,000 $ 100,000,000 $ 54,000,000 $ 240,000,000 Research & Development $ 60,000,000 Using revenue as an allocation base, the amount of costs allocated to the Illinois research facility is calculated to be:
Organic Laboratories allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments: Facility location Kentucky Arizona Illinois Total New product revenue $ 86,000,000 $ 100,000,000 $ 54,000,000 $ 240,000,000 Research & Development $ 60,000,000 Using revenue as an allocation base, the amount of costs allocated to the Illinois research facility is calculated to be:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Organic Laboratories allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments:
| Facility location | Kentucky | Arizona | Illinois | Total | ||||||||
| New product revenue | $ | 86,000,000 | $ | 100,000,000 | $ | 54,000,000 | $ | 240,000,000 | ||||
| Research & Development | $ | 60,000,000 | ||||||||||
Using revenue as an allocation base, the amount of costs allocated to the Illinois research facility is calculated to be:
Multiple Choice
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$25,500,000.
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$20,500,000.
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$13,500,000.
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$6,500,000.
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$17,000,000.
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