About the corporate cost;

Allocate the $20,000,000 million corporate headquarters cost of Bright Inc. to the three subsidiaries in USA, Australia and New Zealand using:

number of employees in each operating company as the allocation base.

net income of each operating company as the allocation base.

Write a report to the management of Bright Inc. to explain about the advantages and disadvantages of allocating corporate headquarters costs using (1) employees and (2) net income as allocation bases.