Which of the following is NOT a component that requires allocation in a sales arrangement?

Revenue expenditure is not a component that requires allocation in a sales arrangement. In the context of revenue recognition, particularly under the guidelines provided by ASC 606, a sales arrangement typically involves the identification of performance obligations and the allocation of the transaction price to those obligations based on their stand-alone selling prices.

Performance obligations are specific promises to provide goods or services to a customer, and the transaction price is the amount of consideration expected to be received in exchange for transferring those goods or services. Stand-alone selling prices are important because they help determine how to allocate the transaction price among the various performance obligations within the arrangement.

In contrast, revenue expenditure refers to spending that is typically associated with the day-to-day operations of a business and does not involve the direct allocation within a sales arrangement context. Instead, revenue expenditures are expensed in the period they are incurred, focusing on operational costs rather than the allocation of revenue from sales.