Burwell Manufacturing is organized into two divisions $($Agriculture and Mining$)$ and a corporate headquarters. The

financial group of the corporate staff prepared financial operating plans $($budgets$)$ for the two divisions for the

upcoming year $($year $1).$ Selected information from the plans is as follows:

Corporate overhead costs are expected to be $$3\mathrm{.}5$ million in year $1.$ Of the $$3\mathrm{.}5$ million, $$1\mathrm{.}25$ million is fixed and the

remainder is variable. Two$-$thirds of the variable cost is variable with respect to revenue. The other third is variable with

respect to the number of full$-$time equivalent $($FTE$)$ employees. Division managers are evaluated and compensated in

part on division operating profit $($including any allocated corporate costs$)$ relative to the budget. Corporate overhead at

Burwell is allocated based on relative revenues to determine both budgeted and actual operating profit.

Required:

a$.$ What are the budgeted operating profits in each division for year $1$ after the corporate costs are allocated?

b$.$ At the end of year $1,$ actual corporate costs incurred were $$3\mathrm{.}7$ million. Of the $$3\mathrm{.}7$ million, $$1\mathrm{.}44$ million was fixed,

$$1\mathrm{.}3$ million was variable with respect to revenues, and $$0\mathrm{.}96$ million was variable with respect to FTEs. Actual

division results in year $1,$ prior to any allocation, are as follows:

What are the actual $($reported$)$ operating profits in each division for year $1$ after the corporate costs are allocated?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

What are the budgeted operating profits in each division for year $1$ after the corporate costs are allocated?

Note: Do not round intermediate calculations. Enter your answers in thousands of dollars.