WKU is doing the following two research projects: X: Developing identity theft prevention software. The software will be sold in the market. Y: Cost reimbursement contract with the US Treasury Department. WKU performs a financial fraud detection research and it will be reimbursed 250% of the reported costs incurred in the project. For each project, WKU incurred both direct and indirect costs. WKU incurred a total of $1,000,000 indirect costs. Indirect costs are allocated using a base chosen by WKU. The following information is given: Project Direct costs Computer time in hours (CTH) Pages of all articles read (PAR) Lab experimental hours (LEH) Number of assistants used (NAU) X $1,000,000 5,000 65,000 1,000 300 Y $2,500,000 5,000 35,000 4,000 500 Which of the following allocation bases is the best for the benefit of WKU? A. CTH B. LEH C. PAR D. NAU E. Any. All allocation bases result in the same amount of benefit to WKU.
QUESTION 30
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WKU is doing the following two research projects:
X: Developing identity theft prevention software. The software will be sold in the market.
Y: Cost reimbursement contract with the US Treasury Department. WKU performs a financial fraud
detection research and it will be reimbursed 250% of the reported costs incurred in the project.
For each project, WKU incurred both direct and indirect costs. WKU incurred a total of $1,000,000 indirect costs. Indirect costs are allocated using a base chosen by WKU. The following information is given:
Project
Direct costs
Computer time in hours
(CTH)
Pages of all articles read
(PAR)
Lab experimental hours (LEH)
Number of assistants used (NAU)
X
$1,000,000
5,000
65,000
1,000
300
Y
$2,500,000
5,000
35,000
4,000
500
Which of the following allocation bases is the best for the benefit of WKU?
A. CTH
B. LEH
C. PAR
D. NAU
E. Any. All allocation bases result in the same amount of benefit to WKU.
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