PLEASE ANSWER THE FOLLOWING QUESTIONS: Requirements 1. Allocate the indirect costs of Francisco to each division equally. Calculate division operating income after allocation of headquarter costs. 2. Allocate headquarter costs to the individual divisions using the proposed allocation bases. Calculate the division operating income after allocation. Comment on the allocation bases used to allocate headquarter costs. 3. Which division manager do you think suggested this new allocation? Explain briefly. Which allocation do you think is "better"? Data table Costs incurred in the main headquarters are as follows: Human resources (HR) costs $ 1,700,000 Accounting department costs 1,300,000 Rent and depreciation Other 1,440,000 510,000 $ 4,950,000 Total costs The Francisco upper management currently allocates this cost to the divisions equally. One of the division managers has done some research on activity-based costing and proposes the use of different allocation bases for the different indirect costs - number of employees for HR costs, total revenues for accounting department costs, square feet of space for rent and depreciation costs, and equal allocation among the divisions of "other" costs. Information about the three divisions follows: Bread Cake Total revenues $ 21,300,000 $ 14,100,000 Doughnuts 4,300,000 $13,500,000 2,900,000 7,550,000 Direct costs $ 7,200,000 $ 1,400,000 $ 5,950,000 Segment margin Number of employees Square feet of space 600 150 250 18,000 3,000 9,000