Question
Carbrook Corporation has three divisions pulp, paper, and fibers, Carbrook's new controller, Eric Croft, is reviewing the allocation of fixed corporate-overhead costs to the
Carbrook Corporation has three divisions pulp, paper, and fibers, Carbrook's new controller, Eric Croft, 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 Click the icon to view the data) Until now. Carbrook Corporation has allocated fixed corporate-overhead costs to the divisions on the basis of division margins. Croft asks for a list of costs that comprise fixed corporate overhead and suggests the following new allocation bases: (Click the icon to view the fixed corporate overhead and new allocation bases) Read the requirements Requirement 1. Alocate 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, XX, and dollar amounts to the nearest dollar. Enter operating margin percentages to one decimal, XX%) Pulp Paper Fibers Division margin $ 3,000,000 $ 7,300,000 $ 9,700,000 Allocated fixed corporate-overhead Operating margin Operating margin %
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