Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with requirement 1 Lidster Corporation has three divisions: pulp, paper, and fibers. Lidster's new controller, Leon Becker, is reviewing the allocation of fixed

need help with requirement 1

image text in transcribed

Lidster Corporation has three divisions: pulp, paper, and fibers. Lidster's new controller, Leon Becker, 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.) Until now, Lidster Corporation has allocated fixed corporate-overhead costs to the divisions on the basis of division margins. Becker asks for a list of costs that comprise fixed corporate overhead and suggests the following new allocation bases: (Click the icon to view the fixed corporate overhead and new allocation bases.) Read the requirements. Requirement 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)? Allocate the fixed corporate-overhead costs, then calculate the division operating margins in dollars and as a percentage of revenue. (Round allocation proportions to one decimal place, X.X%, and dollar amounts to the nearest dollar. Enter operating margin percentages to one decimal, X.X%.) Pulp Fibers Paper 7,200,000 Division margin $ 2.300.000 $ $ 10,500,000 Data table Allocated fixed corporate-overhead Operating margin Operating margin % Data table % % % Fibers $ 25,400,000 Revenues Direct manufacturing costs Pulp 9,000,000 $ 3,900,000 2,800,000 Paper 16,700,000 $ 8,500,000 1,000,000 Suggested Allocation Bases 10.700.000 4.200.000 Division administrative costs Fixed Corporate-Overhead Costs Human resource management $ Facility $ 2,300,000 $ 7,200,000 $ 10,500,000 Division margin Number of employees Floor space (square feet) 2,000,000 Number of employees 3,100,000 Floor space (square feet) 4,600,000 Division administrative costs 9,700,000 320 120 360 Corporate administration $ 38.400 23,160 58.440 Total Print Done Print Done

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

2nd Edition

0471347744, 978-0471347743

More Books

Students also viewed these Accounting questions