I'm working on question two of ths PWC case: https://www.coursehero.com/file/34062186/Pittsburgh-Walsh-Company-Case-Fall-2018-3docx/#/question

My initial answer 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 professor sent me the following message with the opportunity to update my answer: for Q2, 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?