The National Railroad allocates all central corporate overhead costs to its divisions. Some costs, such as specified internal auditing and legal costs, are identified on the basis of time spent. However, other costs are harder to allocate, so the revenue achieved by each division is used as an allocation base.
Examples of such costs are executive salaries, travel, secretarial, utilities, rent, amortization, donations, corporate planning, and general marketing costs

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DIVISION REVENUE ALLOCATED COSTS Northern $120 $ 7 Central 240 14 Southern 240 14 Total $600 $35