Requirements 1. Allocate 2020 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 2020 fixed costs using the allocation bases suggested by Baker. 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 Fahley Corporation use? Why? How might Baker overcome any objections that may arise from the divisions? ne CO Data table div Revenues Direct manufacturing costs Pulp 9,100,000 $ Paper 16,200,000 $ 4,000,000 8,000,000 Fibers 25,800,000 11,100,000 2,800,000 1,000,000 4,200,000 Division administrative costs ma $ 2,300,000 $ 7,200,000 $ 10,500,000 Division margin All Number of employees 420 280 700 Floor space (square feet) 29,000 19,000 52,000 Di A Print Done - Data table Fixed Corporate-Overhead Costs Human resource management Facility Corporate administration Total Suggested Allocation Bases $ 1,700,000 Number of employees 2,800,000 Floor space (square feet) 4,200,000 Division administrative costs $ 8,700,000 -