Lynn Rogers, controller of Cantley Oil Company, is preparing a presentation to senior executives about the performance of its four divisions. Summary data (dollar amounts in millions) related to the four divisions for the most recent year are as follows: BEE Click the icon to view the summary data. Under the existing accounting system, costs incumed at corporate headquarters are collected in a single cost pool ($4,000 million in the most recent year) and allocated to each division on the basis of its actual revenues. The top managers in each division share in a division income bonus pool. Division income is defined as operating income less allocated corporate costs. Rogers has analyzed the components of corporate costs and proposes that corporate costs be collected in four cost pools. The components of corporate costs for the most recent year (dollar amounts in millions) and Rogers' suggested cost pools and allocation bases are as follows EEa (Click the icon to view the suggested cost pools and allocation bases.) Read the requirements Requirements Ll D. To quantify the potential for sales grovth Requirement 2. Calculate the operating income of each division when all corporate costs a arentheses. Oil and Gas il and Gas Chemical 1. Select two reasons why Cantley oil should allocate corporate costs to each division. Upstream Downstream Products 2. Calculate the operating income of each division when all corporate costs are Operating income 5,700 750 750 S allocated based on revenues of each division. 3. Calculate the operating income of each division when all corporate costs are Allocated corporate costs allocated using the four cost pools. Division operating income (loss) 4. How do you think the division managers will receive the new proposal? What are the strengths and weaknesses of Rogers' proposal relative to the existing e-cost-pool meth Enter any number in the edit fields and then Click Check