For a pharmaceutical company,the most suitable base for allocating research and development costs to the finished products would be the ________.
A) direct labor hours
B) cost of raw materials purchased
C) number of new patents filed
D) number of set ups

Question

Quizplus · Accepted Answer

The number of new patents filed would be the most suitable base for allocating research and development costs to finished products for a pharmaceutical company as this measure directly reflects the innovative efforts and success of the company's R&D department in developing new products. Direct labor hours and cost of raw materials purchased may not accurately reflect the R&D efforts, and the number of set ups may be more relevant for manufacturing costs rather than R&D costs.

For a Pharmaceutical Company,the Most Suitable Base for Allocating Research