1.) What was the Commercial Divisions FY2021 profit using the current allocation method?

2.) What was the Commercial Divisions FY2021 profit as a percentage of divisional sales using the current allocation method? Express as a decimal, i.e., 12% should be entered as "0.12" and round to the nearest 0.001,

3.) What would have been the Commercial Divisions FY2021 profit as a percentage of divisional sales if RMS used ABC to allocate A/R costs? Express as a decimal, i.e., 12% should be entered as "0.12" and round to the nearest 0.001,

Ricardo Maritime Systems (RMS) is a global freight forwarding company'. The company has two divisions: Commercial and Retail. The Commercial Division services customers with ongoing shipping requirements. These clients usually have contracts specifying costs and shipping schedules lasting up to one year. The Retail Division handles shipments for customers with occasional shipping requirements. These customers pay on a per shipment basis. All customer billing is handled by the Accounts Receivable (A/R) department. A/R's main functions are Biling (the preparation and transmission of invoices as well as processing payments) and Account Management (establishing accounts, verification of customer credit status, and collections of late accounts). RMS currently allocates the costs of the A/R department to the Commercial and Retail divisions using the number of bills prepared as a basis. The manager of the Commercial Division is concerned the allocated costs from the A/R department causes the Commercial Division to look less profitable than it actually is. She has asked the Finance Department to consider changes to the way the A/R department's costs are allocated. Data on costs and activities in the A/R Department for the most recent year (FY2021) are shown next. "For a report on freight forwarding and the source of the figure see. htlps:/Wwww.mckinsey.com/industries/travel-logistics-andinfrastructure/our-insights/lreight-forwarders-earnings-amid-carrier-rate-volatility The Accounts Receivable Department incurred the following costs during the year. Additional information that pertains to Questions 8, 9, and 10. Suppose that in FY2021 RMS had total Sales of $40M with 80% occurring in the Commercial Division and 20% in the Retail Division. CGS and other operating expenses (excluding the A/R department charges) amount to 93% of Sales leaving the remainder to cover the A/R department charges and profits. RMS sets an annual goal for division managers to earn profits of at least 6% of Sales