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please complete all requriments part 1,2,3,4 Kunden Corporation has three divisions: pulp, paper, and fibers, Kunden's new controllet, Eric Croft, is reviewing the alocation of
please complete all requriments part 1,2,3,4
Kunden Corporation has three divisions: pulp, paper, and fibers, Kunden's new controllet, Eric Croft, is reviewing the alocation of foxed corporate-overhead costs to the three Unti nove Kunden Corporation has allocated fixed corpoaterovertead costs to the divisions on the basis of division margins. Crof asics for a ist of coss that divisions. He is preserted with the following information for each division for 2017: comprise foxed coporate overhead and supgests the followng new aloc ation (Cick the icon 10 view the data) bases: (Cick the icon to view the fored copporate overheod and aw afocition bases) ) Requirement 1. Allocate 2017 tixed corporae-ovenend costs 10 the thee disions using division margin as the alocation base. What is each divisions aperaing margin pricertagn (division margin minus allocaed fixed corporate-overhead costs as a percentage of revenues)? Allocate the fored coporate-overtead costs, then calculate the division openating margins in dolas and as a percentage of revenue. (Round allociacion propernons to one decinal place, X. Data table Data table 1. Allocate 2017 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 2017 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 Step by Step Solution
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