Data ble gr B D E F ded 1 owth Candy Cookies mer Total wN partie 3 Revenue $ 1,116,000 $ DIVISIONS Nuts Crackers 1,080,000 $ 684,000 $ 463,410 686,000 616,590 $ (2,000) $ income 559,080 556,920 $ 720,000 $3,600,000 567,510 2,276,000 152,490 $ 1,324,000 ste signs 4 Operating costs 5 Operating Income 6 Identifiable assets 7 Number of employees $ $ 2,240,000 $ Candy 556 3,520,000 $ 1,440,000 $ 2,760 800,000 $ 8,000,000 360 12,000 3,720 5,160 Print Done Under the existing accounting system, costs incurred at corporate headquarters are collected in a single cost pool ($1.3 million in the most recent year) and allocated to each division on the basis of its actual revenues. The top managers in each division share in a division-income bonus pool. Division income is defined as operating income less allocated corporate costs. Tripp has analyzed the components of corporate costs and proposes that corporate costs be collected in four cost pools isi Jon proport sel cis wth. er re rties. B D Suggested 11 Corporate Cost Category Amount Cost Pool Suggested Allocation Base 12 Interest on debt $ 580,000 Cost Pool 1 Identifiable assets 13 Corporate salaries 130,000 Cost Pool 2 14 Accounting and control 170,000 Cost Pool 2 Division revenues 15 General marketing 230,000 Cost Pool 2 16 Public affairs 100,000 Cost Pool 3 Positive operating income 17 Personnel and payroll 90,000 Cost Pool 4 Number of employees 18 Total $ 1,300,000 * Tripp proposes that this cost be allocated using operating income (if positive) of divisions, with 19 only divisions with positive operating income included in the allocation base. ome ns to o gns of andy 556,9 S. ention 1. Select two reasons why Hungry Snacks should allocate corporate costs to each division. 2. Calculate the operating income of each division when all corporate costs are allocated based on revenues of each division. 3. Calculate the operating income of each division when all corporate costs are allocated using the four cost pools. 4. How do you think the division managers will receive the new proposal? What are the strengths and weaknesses of Tripp's proposal relative to the existing single-cost-pool method? on pro of each divis or parenthese Nu 6,920 $ Print Done Lyon Tripp, carteller of the Hungry Snacks, is preparing a presentation to senior executives about the performance of its four divisions. Summary data related to the four divisions for the most recent year Salows Click the loon to view the summary data) Click the loon to view more information) The components of corporate costs for the most recent year and Triop's suggested cost pools and allocation bases are as follows: E Cick the icon to view the suggested cost pools and location bases.) Read the Requirement 1. Select two reasons why Hungry Snacks should allocate corporate costs to each division To provide information for economic decisions 1. To get the potential for sales growh. X. To nie the likelihood of customer relation to come moment for external parties Requirement 2. Code Decorating nome eschis who al corporate costs are located based on revenues of each division (Round allocation proportions to one place (decimal values to three plac Enter cering wth or parentheses) Candy Nuts Crackers Cookies Os come 5565205 616.00 $ (2.000) 152,410 Noor
