CASE STUDY SITUATION You are to assume the role of management accountant at THE SHOWDOWN INSURANCE COMPANY, an insurance company that specializes in automobile insurance. The assistant controller has asked you to put together a managerial report outlining the responsibility center's various budgets. You have been asked by the assistant controller to also present a short discussion on THE SHOWDOWN INSURANCE COMPANY'S long-term financial plans using accounting performance measures. Below is a profit&loss summary of the prior month Total Region III Central 3.151.133 Region IV Westem 1.117.886 11,066,486 2.507503 08.099 7.471.678 193.357 75,012 633,441 The Showdown Insurance Company Region Region 11 Mid-Atlantic Southern Premiums 4.617.968 2.179,499 Earned Losses 2.905.266 1.250,810 Los Adjustment 256.079 128,992 Expense General Expenses 853,173 415,746 Direct General Expenses Overhead Operating Income 603.450 383,950 405 308 265,630 1,940,057 44.765 (30.855) 1.001,310 The assistant controller also provided you with the total expenses related to corporate costs, not directly affiliated with a specific regional profit center. That total is S501.625. YOUR CHALLENGE With this information, you can now allocate the corporate costs to each of the four regions. Once you have calculated the overhead expenses per region, re-calculate the Operating Income and present your findings to the assistant controller. Be sure to outline the performance of each region post-overhead inclusion and how it may affect strategic company goals. You will explain the information to the assistant controller in writing to include: 1. How did you allocate the indirect expenses? 2. Which region is more profitable? 3. What else might you consider when evaluating the regions! 4. Are there any ethical implications to consider