Ford Bakery makes baked goods for grocery stores, and has three divisions: bread, cake, and douahnuts. Each division is run and evaluated separatelv. but the main headquarters incurs costs that are indirect costs for the divisions. E (Click to view information for each division and the main headquarters.) Data table Read the requirements. Costs incurred in the main headquarters are as follows: Requirement 1. Allocate the indirect costs of Ford to each division equally. Calculate div or parentheses.) Human resources (HR) costs $ 2,300,000 Bread Cake Dough Accounting department costs 1,800,000 Segment margin 7,200,000 $ 1,400,000 $ 6 Rent and depreciation 640,000 Allocated headquarter costs Other 660,000 $ 5,400,000 Operating income (loss) Total costs The Ford 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: Requirements Bread Cake Doughnuts Total revenues $ 21,200,000 $ 4,700,000 $ 13,200,000 1. Allocate the indirect costs of Ford to each division equally. Calculate division operating income after allocation of headquarter costs. 14,000,000 3,300,000 7,000,000 Direct 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. 7,200,000 $ 1,400,000 $ 6,200,000 Segment margin Number of employees 700 200 100 3. Which division manager do you think suggested this new allocation? Explain briefly. Which allocation do you think is "better"? Square feet of space 8,000 2,000 6,000 Print Done Print Done