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6 PX252 ney k tieved Problem 12-49 (Algo) Dual and Single Allocation Rates (LO 12-6) Stable Enterprises is organized into two geographic divisions (Asia and
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PX252 ney k tieved Problem 12-49 (Algo) Dual and Single Allocation Rates (LO 12-6) Stable Enterprises is organized into two geographic divisions (Asia and Europe) and a corporate headquarters. Late in year 7. the Stable Finance Department prepared financial operating plans (budgets) for the two divisions, shown as follows (in thousands of dollars) Asia $85,800 42,900 $42,900 Europe $109, 200 Revenues Direct division costs Operating profit before allocation 65,520 $ 43,680 Corporate overhead costs (in thousands of dollars) are expected to be $54.000 in year 8. Of the $54.000, $34,500 is fixed and $19,500 is variable, with respect to revenue. Division managers are evaluated and compensated in part on division operating profit relative to the budget Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for year 8 after the corporate costs are allocated? b. At the end of year 8, actual corporate costs incurred in thousands of dollars) were $27,000. Of the $27.000, $14,500 was foxed. Actual results (in thousands of dollars) in the two divisions are as follows Revenues Direct costs Operating profit before allocation Asia $85,800 42,000 $42.000 Europe $109,200 05520 5.41,600 What are the operating profits in each division for year after the corporate costs are allocated Complete this question by entering your answers in the tabs below. Required A Required B Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for year 8 after the corporate costs are allocated? b. At the end of year 8, actual corporate costs incurred in thousands of dollars) were $27.000. Of the $27,000, $14,500 was fixed. Actual results (in thousands of dollars) in the two divisions are as follows Asia Europe Revenues $85,880 $109,200 Direct costs 42,900 65 520 Operating profit before allocation $42,900 $ 43,680 What are the operating profits in each division for year 8 after the corporate costs are allocated? Complete this question by entering your answers in the tabs below. Required A Required B Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for years after the corporate costs are allocated? (Do not round intermediate calculations.) Asia Europe Total $ ols 05 Revenues Direct costs Operating proft before allocations Corporate couts Operating profit 0 0 % 5 05 Required > Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for year 8 after the corporate costs are allocated? b. At the end of year 8, actual corporate costs incurred (in thousands of dollars) were $27.000. Of the $27.000, $14,500 was fixed. Actual results (in thousands of dollars) in the two divisions are as follows Revenues Direct costs Operating profit before allocation Asia $85,800 42,900 $42,900 Europe $109,200 65 520 $ 43,680 What are the operating profits in each division for year 8 after the corporate costs are allocated? Complete this question by entering your answers in the tabs below. Required A Required B What are the operating profits in each division for year 8 after the corporate costs are allocated? (Do not round Intermediate calculations.) Asia Europe Total $ 0 $ ols Revenues Direct costs Operating profit before alocations Corporate costs Operating profit $ 5 05 Step by Step Solution
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