costs for the divisions. (Click to view information for each division and the main headquarters.) Read the requirements. Data table Requirements Costs incurred in the main headquarters are as follows: 1. Allocate the indirect costs of Fortune to each division equally. Calculate division operating income after allocation of headquarter costs. 2. Allocate headquarter costs to the individual divisions using the proposed allocation bases. Calculate the division operating income after allocation. Comment on the allocation bases used to allocate headquarter costs. 3. Which division manager do you think suggested this new allocation? Explain briefly. Which allocation do you think is "better"? The Fortune upper management currently allocates this cost to the divisions equally. One of the division managers has done some research on activity-based costing and proposes the use of different allocation bases for the different indirect costs - number of employees for HR costs, total revenues for accounting department costs, square feet of space for rent and depreciation costs, and equal allocation among the divisions of "other" costs. Information about the three divisions follows: \begin{tabular}{lcrrr} & \multicolumn{2}{c}{ Bread } & \multicolumn{1}{c}{ Cake } & Doughnuts \\ \hline Segment margin & $ & 6,200,000 & 1,100,000$5,700,000 \\ Allocated headquarter costs & & \\ Operating income (loss) & & \end{tabular} places. Enter operating losses with minus signs or parentheses.) \begin{tabular}{lrrrr} & Bread & Cake & Doughnuts \\ \hline Segment margin & $ & 6,200,000$ & 1,100,000$ & 5,700,000 \end{tabular} Allocated headquarter costs: Human resources Accounting department Rent and depreciation Other Comment on the allocation bases used to allocate headquarter costs. A cause-and-effect relationship between Human Resources costs and the number of employees at each division. Rent and depreciation costs related to square feet. The Accounting Department costs are related to the revenues earned by each division. Other overhead costs are allocated arbitrarily so the method used Requirement 3. Which division manager do you think suggested this new allocation? Explain briefly. The manager suggesting the new allocation bases probably works in the Division. Under the old scheme, this division was allocated amount of costs even though it was much than the other divisions. Comment on the allocation bases used to allocate headquarter costs. A cause-and-effect relationship between Human Resources costs and the number of employees at each division. Rent and depreciation costs related to square feet. The Accounting Department costs are related to the revenues earned by each division. Other overhead costs are allocated arbitrarily so the method used Requirement 3. Which division manager do you think suggested this new allocation? Explain briefly. The manager suggesting the new allocation bases probably works in the Division. Under the old scheme, this division was allocated amount of costs even though it was much than the other divisions. The new allocation scheme shows an operating in this Division, even after allocating headquarter costs. Which allocation do you think is "better"? The method is a better way to allocate headquarter costs because it