I had am working on question two from the PWC case (https://www.coursehero.com/file/34062186/Pittsburgh-Walsh-Company-Case-Fall-2018-3docx/)

My initial response was:

The current bonus plan rewards managers that exceed the planned product line income (or operating income) by more than 10 percent; however, that does not consider any changes in production targets or business shifts, such as closing a division. The electronic timing devices division only exceeded its operating income target by $7,000 or 3.65%, the division increased its production targets by 10,000 and as a result, increased its common fixed overhead expenses significantly (from $120k to $195k). If the mid-range division had not closed and the common fixed overhead expenses had remained at $120k, the division would have an operating income of $274k or 42.7% above the annual target and would receive a bonus.

but my profrsssor replied with, "take a closer look at the allocation of common fixed expenses, including the base being used. Is this fair to ETD?"

what am I missing?