Question: Implement an ABC system in Microsoft Corporation to allocate R&D costs across software projects. Determine cost drivers related to coding hours, testing hours, and customer

Implement an ABC system in Microsoft Corporation to allocate R&D costs across software projects.

Determine cost drivers related to coding hours, testing hours, and customer support requests.

Allocate costs to different software projects based on development complexity and user base.

Analyze project profitability using ABC allocations and recommend strategies to enhance innovation and customer support.

Cost Drivers

Allocation Basis

Annual Cost Allocation ($)

Coding Hours

Number of hours

$15,000,000

Testing Hours

Number of hours

$10,000,000

Customer Support Requests

Number of requests

$5,000,000

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