Kunden Corporation has three divisions: pulp, paper, and fibers. 's new controller, , is reviewing the allocation of fixed corporate-overhead costs to the three divisions. He is presented with the following information for each division for :

1.	Allocate 2020 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)?
2.	Allocate 2020 fixed costs using the allocation bases suggested by Croft. What is each division's operating margin percentage under the new allocation scheme?
3.	Compare and discuss the results of requirements 1 and 2. If division performance incentives are based on operating margin percentage, which division would be most receptive to the new allocation scheme? Which division would be the least receptive? Why?
4.	Which allocation scheme should Kunden Corporation use? Why? How might Croft overcome any objections that may arise from the divisions?

Kunden Corporation has three divisions: pulp, paper, and fibers. Kunden's new controller, David Croft, is reviewing the allocation of fixed corporate-overhead costs to the three divisions. He is presented with the following information for each division for 2020: (Click the icon to view the data.) Requirement 1. Allocate 2020 fixed corporate-overhead costs to the three divisions using division margin as the allocation base. What is each division's operatir Allocate the fixed corporate-overhead costs, then calculate the division operating margins in dollars and as a percentage of revenue. (Round allocation proportio one decimal, X.X\%.)