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Please help with each of the requirements! Thanks in advance! Farley Bakery makes baked goods for grocery stores, and has three divisions: bread, cake, and

Please help with each of the requirements! Thanks in advance!image text in transcribed

Farley Bakery makes baked goods for grocery stores, and has three divisions: bread, cake, and doughnuts. Each division is run and evaluated separately, but the main headquarters incurs costs that are indirect costs for the divisions. B (Click to view information for each division and the main headquarters.) Read the requirements. Requirement 1. Allocate the indirect costs of Farley to each division equally. Calculate division operating income after allocation of headquarter costs. (Enter operating losses with minus signs or parentheses.) Bread Cake Doughnuts 5,950,000 - X Data Table Segment margin 6,300,000 $ 1,300,000 $ Allocated headquarter costs Operating income (loss) Costs incurred in the main headquarters are as follows: Requirements Human resources (HR) costs $ 2,200,000 Accounting department costs 1,700,000 Rent and depreciation 870,000 630,000 Other $ 5,400,000 Total costs The Farley 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: 1. Allocate the indirect costs of Farley 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"? Bread Total revenues $ 21,000,000 $ 14,700,000 Cake Doughnuts 4,100,000 $ 13,300,000 2,800,000 7,350,000 Direct costs Print Done $ 6,300,000 $ 1,300,000 $ 5,950,000 Segment margin Number of employees Square feet of space 500 150 150 7,500 3,000 4,500

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