Red Company allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments: Facility location New product revenue Research & Development Using revenue as an allocation base, the amount of costs allocated to the Kentucky research facility is calculated to be: Kentucky Arizona Illinois $ 57,628,800 $ 100,060,000 $ 82,431,200 Total $ 240,120,000 $ 60,060,000