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Part $1$

Fortune 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.

LOADING... $($Click to view information for each division and the main$$ headquarters.$)$

Requirements

$1.$

Allocate the indirect costs of Fortune to each division equally. Calculate division operating income after allocation of headquarters costs.

$2.$

Allocate headquarters 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 headquarters costs.

$3.$

Which division manager do you think suggested this new$$ allocation? Explain briefly. Which allocation do you think is$$ "better"