Organic Laboratories Allocates Research and Development Costs to Its Three

question 91

Multiple Choice

Organic Laboratories allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments: $\begin{array}{ll}\text { Facility location }&\text { Kentucky }&\text { Arizona }&\text { Illinois }&\text { Total }\\\text { New product }\\\text { revenue }&\$56,000,000&\$100,000,000&\$84,000,000&\$240,000,000\\\text { Research \& }\\(\text { Development }&&&&\$60,000,000\\\end{array}$
Using revenue as an allocation base, the amount of costs allocated to the Arizona research facility is calculated to be:

• A) $25,000,000.
• B) $31,000,000.
• C) $44,000,000.
• D) $19,000,000.
• E) $36,000,000.

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Definitions:

Development

Refers to the process of growth, progress, or evolution, often in the context of economic, social, or technological advancements.

Strategy Development

The process of identifying, planning, and executing actions to achieve organizational goals and gain a competitive advantage.

Battery Recycler

A company or facility involved in the process of reclaiming the usable materials from used batteries for the production of new batteries or other products.

Manufacturing Issues

Problems or challenges encountered in the production process that can affect efficiency, quality, and product availability.