Giardin Outdoors is a recreational goods retailer with two divisions: Online and Stores. The two divisions both use the services of the corporate Finance and Accounting $($F and A$)$ Department. Annual costs of the F and A Department total $$5\mathrm{.}270$ million a year. Managers in the two operating divisions are measured based on division operating profits.

The following selected data are available for the two operating divisions:

Revenues

$($$$000)$ Transactions

$(000)$

Online $ $76,9001,766\mathrm{.}5$

Stores $42,700633\mathrm{.}5$

Required:

What is the F and A cost that is charged to each division if divisional revenues are used as the allocation basis?

What is the F and A cost that is charged to each division if the the number of transactions is used as the allocation basis?