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Please answer 3 profit centers of Marketing, Administration an Net income ? Currently, Finsys does not allocate the marketing and administration costs to the three
Please answer 3 profit centers of Marketing, Administration an Net income ?
Currently, Finsys does not allocate the marketing and administration costs to the three profit centers. The CEO and CFO believe that the three profit centers' operating profits are not indicative of the real profits of these profit centers because the profit centers are not bearing any of the marketing and administration expenses. The CEO and CFO propose allocating the marketing and administration costs back to the three profit centers based on the percentage of the profit centers' revenues to Finsys' total revenue. Required: a. Prepare a revised set of financial statements that report each profit centers' net income after allocating the marketing and administration costs back to the three profit centers using revenues as the allocation baseStep by Step Solution
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