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 $ 56,000,000 $ 100,000,000 $ 84,000,000 $ 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 $14,000,000. $28,000,000. $33,000,000. $17,000,000. $21,000,000.

Answer 1

Answer:

$21,000,000

Explanation:

Ratio is used in allocating the research and development cost

This is the expression of relationship between two or more data showing the number of times one data contains or is contained in another data

Total research and development cost = $60,000,000

Revenue

Kentucky = $56,000,000

Arizona -= $ 100,000,000

Illinois =    $84,000,000

Total =     $240,000,000

Illinois allocation of research and development cost=

84,000,000/240,000,000*60,000,000 =$21,000,000