Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E14-24 (similar to) 3 Question Help O Bethany Corporation has three divisions: pulp, paper, and fibers. Bethany's new controller, Tim Baker, is reviewing the allocation

image text in transcribed

E14-24 (similar to) 3 Question Help O Bethany Corporation has three divisions: pulp, paper, and fibers. Bethany's new controller, Tim Baker, 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: B (Click the icon to view the data.) Until now, Bethany Corporation has allocated fixed corporate-overhead costs to the divisions on the basis of division margins. Baker 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 corporale overhead and new allocation bases.) Read the requirements. Requirement 1. Allocate 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, X.X%, and dollar amounts to the nearest dollar. Enter operating margin percentages to one decimal, X.X%.) Pulp Paper Fibers i Data Table Division margin $ 2.300,000 $ 7,200,000 $ 10,500,000 Allocated fixed corporate-overhead Pulp Paper Fibers Operating margin i Data Table Revenues 8,600,000 $ 16,900,000 $ 26,500,000 Operating margin % Direct manufacturing costs 3,100,000 7,700,000 11,200,000 3,200,000 2,000,000 4,800,000 Division administrative costs Fixed Corporate-Overhead Costs Suggested Allocation Bases 2,300,000 $ 7,200,000 $ 10,500,000 Division margin Human resource management S 2,400,000 Number of employees Number of employees 510 425 Enter any number in Facility 3,600,000 Floor space (square feet) Floor space (square feet) 46,800 33,480 99,720 Corporate administration 4,200,000 Division administrative costs $ 10,200,000 Print Total Done A parts 4 remaining

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An Integrated Approach

Authors: Michael Gibbins

6th Edition

0176407251, 978-0176407254

More Books

Students also viewed these Accounting questions

Question

According to the text, what makes a person successful?

Answered: 1 week ago

Question

How does or how might the key public affect your organization?

Answered: 1 week ago