Fredette Bakery makes baked goods for grocery stores, and has three divisions: bread, cake, and doughnuts. Each division is run and evaluated separately, but the main headquarters incurs costs that are Indirect costs for the divisions (Click to view information for each division and the main headquarters.) Read the requirements Requirement 1. Allocate the indirect costs of Fredette to each division equally. Calculate division operating income after allocation of headquarter costs. (Enter operating losses with minus signs or parentheses.) Bread Cake Doughnuts Segment margin 6,600,000 $ 1,600,000 $ 6,050,000 Allocated headquarter costs Operating Income (los) Requirement 2. Allocate headquarter costs to the individual divisions using the proposed allocation bases. Calculate the division operating income after allocation (Round allocation proportions to three decimal places. Enter operating losses with minus signs or parentheses) Bread Cake Doughnuts Segment margin 6,600,000 $ 1,600,000 $ 6,050,000 Allocated headquarter costs Human resources Accounting department Rent and depreciation Other Operating Income (loss) Comment on the allocation bases used to allocate headquarter costs. A causo-and-effect relationship between Human Resouront costs and the number of employees at each division Rent and depreciation costs related to square foot 1 1 Data Table Warter costs Income afte Costs incurred in the main headquarters are as follows: Human resources (HR) costs $ 2,000,000 Accounting department costs 1,500,000 Rent and depreciation 1,300,000 450,000 Other $ 5,250,000 Total costs The Fredette 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: Bread Cake Doughnuts Total revenues $ 21,300,000 $ 4,700,000 $ 13,500,000 Direct costs 14,700,000 3,100,000 7,450,000 $ 6,600,000 $ 1,600,000 $ 6,050,000 Segment margin Number of employees 500 200 300 Square feet of space 15,000 5,000 5,000