If you can answer 7, 8 and 9, you understand performance evaluation and cost allocation.

7. Regarding performance evaluation on me, I prefer less amounts of cost allocation to me than more amounts. Am I right?

8. If the government pays me based on the cost-plus method (pay certain percent of the reported cost) for a certain project, I prefer less amount of cost allocated to the project than more amounts. Am I right?

9. Moderna Medical is doing the following two research projects:

A: Performing a research to develop a new testing kit manufacturing process. This process will be

sold in the medical technology market at the market price (to be determined by the demand and

supply).

B: Cot reimbursement contract. The National Health Foundation (NHF) and Morderna had an agreement.

Morderna a mental health research and it will be reimbursed150% of the reported costs (direct and

indirect) incurred in the project.

For each project, Moderna incurred both direct and indirect costs. Indirect costs are allocated

using a base chosen by Moderna.

Mordena incurred a total of $10,000,000 indirect costs.

There are three potential bases of indict cost allocation, LEH, NCU and NRW.

The following information is also given:

Project	Direct costs	Lab experimental time in hours (LEH)	Number of computers used (NCU)	Number of researchers worked (NRW)
A	$5,000,000	2,000	120	700
B	$8,000,000	3,000	120	300

Required: To maximize its monetary benefit, Morderna has an incentive to choose which one as the allocation bases? No computations necessary. Just provide reasoning.