Bergen

Corporation has three divisions: pulp, paper, and fibers.

Bergen's

new controller,

David

Fisher,

is reviewing the allocation of fixed corporate-overhead costs to the three divisions. He is presented with the following information for each division for

2017:

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(Click the icon to view the data.)

Until now,

Bergen

Corporation has allocated fixed corporate-overhead costs to the divisions on the basis of division margins.

Fisher

asks for a list of costs that comprise fixed corporate overhead and suggests the following new allocation bases:

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(Click the icon to view the fixed corporate overhead and new allocation bases.) Read the requirements

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.

Requirement 1. Allocate

2017

fixed corporate-overhead costs to the three divisions using division margin as the allocation base. What is each division's operating margin percentage (division margin minus allocated fixed corporate-overhead costs as a percentage of revenues)?

Allocate the fixed corporate-overhead costs, then calculate the division operating margins in dollars and as a percentage of revenue. (Round allocation proportions to one decimal place, X.X%, and dollar amounts to the nearest dollar. Enter operating margin percentages to one decimal, X.X%.)

	Pulp		Paper		Fibers
Division margin	$6,000,000		$14,600,000		$19,400,000
Allocated fixed corporate-overhead
Operating margin
Operating margin %		%		%		%

$

$

$

$

$

$

$

$

$

$

$

$

Fixed Corporate-Overhead Costs

Suggested Allocation Bases

Human resource management

$4,600,000

Number of employees

Facility

6,400,000

Floor space (square feet)

Corporate administration

9,200,000

Division administrative costs

Total

$20,200,000