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.

---

Definitions:

Discrepancy

A difference or inconsistency between two or more things supposed to be in agreement.

Clout

Influence or power, especially in a political or business context, that enables an individual or organization to effect change or get things done.

Hard Tactics

Aggressive or forceful methods used in negotiation, persuasion, or influence to achieve one's objectives, often disregarding the needs or desires of others.

Uncontaminated Freshwater

Freshwater that is free from pollutants and harmful substances, making it safe for human consumption, recreational activities, and sustaining aquatic life.