Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please complete part 1,2,3,4 Kunden Comoration has thee divisions: pulp, paper, and fibers. Kunderis new controller Unal now, Kunden Corporation has alocated foced corporate-overheud costs
please complete part 1,2,3,4
Kunden Comoration has thee divisions: pulp, paper, and fibers. Kunderis new controller Unal now, Kunden Corporation has alocated foced corporate-overheud costs to the. Felb Becker, is reviewing the allocation of fixod corporate-ovethead costs to the thee divisions on the basis of division margins. Becker asks for a list of costs that divisions. He is presented with the folowing information for each division for 2017: comprise foced corporale overhend and suggests the following rew aliocation Click the icon to wiew the dara.) bises: III (Oick the icon io view the fixt corporate ovetsod and now alocation taces.) Requirement 1. Aloc ate 2017 foxed corponate-ovenead costs to the three divisions ueirg divion margin as the wlocation base What is each divis ints opeatirg magen pere inage (division margin minus alocated fored corporate-overhead costs as a percentige of rovenues)? place. X W, and dollar amounts to the nearest dola, Enter operaking mangin percentages to one docinal, X. X ). Data table Data table Requirements 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 Becker. 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 Becker overcome any objections that may arise from the divisions? Requirement 2. Allocate 2017 toced costs using the allocation bases suggested by Crolt. What is ench division's operating marpin percentage under the new aliocation sezema? Allocate the fixed copporate-ovetroad costs, then calculate the division ogerating magins in doliars and as a percentage of revenue. (Hound alocibon proportons ia ore decima Aequirement 3. Compare and dsciss the resuls of toqurements 1 and 2 If division porformance incentives ate based ori operating margni percertage, which deverion moult be mont seceptive to the rew alocation scheme? Which division would be the least recepeive? Why? When corporate orectweikt is allocated to Ehe dvisions on the basis of dvision mavion (requirement 1). ace (is) proftahle and the Faper" divicon is the Pial dision is not goofitatile and the division is the mont protatibe docreake to a lost (cegritive operating margit) will weicome the change-its gperating marya percentage tises the most. Flequirement 4. Which allocition sctwene should Kunden Corporation ise? Why? How might Ciof overcome any obyections that may ardise from the divisione? The is pelenutle becasio it a based oa cause and eflect relacomshps becween costs and their respective cost divers in the long sun. To overeane oogection form ther dyiskors, Crati may corponate overhead to dvisions when evaluating performance Kunden Comoration has thee divisions: pulp, paper, and fibers. Kunderis new controller Unal now, Kunden Corporation has alocated foced corporate-overheud costs to the. Felb Becker, is reviewing the allocation of fixod corporate-ovethead costs to the thee divisions on the basis of division margins. Becker asks for a list of costs that divisions. He is presented with the folowing information for each division for 2017: comprise foced corporale overhend and suggests the following rew aliocation Click the icon to wiew the dara.) bises: III (Oick the icon io view the fixt corporate ovetsod and now alocation taces.) Requirement 1. Aloc ate 2017 foxed corponate-ovenead costs to the three divisions ueirg divion margin as the wlocation base What is each divis ints opeatirg magen pere inage (division margin minus alocated fored corporate-overhead costs as a percentige of rovenues)? place. X W, and dollar amounts to the nearest dola, Enter operaking mangin percentages to one docinal, X. X ). Data table Data table Requirements 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 Becker. 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 Becker overcome any objections that may arise from the divisions? Requirement 2. Allocate 2017 toced costs using the allocation bases suggested by Crolt. What is ench division's operating marpin percentage under the new aliocation sezema? Allocate the fixed copporate-ovetroad costs, then calculate the division ogerating magins in doliars and as a percentage of revenue. (Hound alocibon proportons ia ore decima Aequirement 3. Compare and dsciss the resuls of toqurements 1 and 2 If division porformance incentives ate based ori operating margni percertage, which deverion moult be mont seceptive to the rew alocation scheme? Which division would be the least recepeive? Why? When corporate orectweikt is allocated to Ehe dvisions on the basis of dvision mavion (requirement 1). ace (is) proftahle and the Faper" divicon is the Pial dision is not goofitatile and the division is the mont protatibe docreake to a lost (cegritive operating margit) will weicome the change-its gperating marya percentage tises the most. Flequirement 4. Which allocition sctwene should Kunden Corporation ise? Why? How might Ciof overcome any obyections that may ardise from the divisione? The is pelenutle becasio it a based oa cause and eflect relacomshps becween costs and their respective cost divers in the long sun. To overeane oogection form ther dyiskors, Crati may corponate overhead to dvisions when evaluating performance Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started