EBK COST ACCOUNTING
EBK COST ACCOUNTING
15th Edition
ISBN: 9780133812763
Author: Rajan
Publisher: VST
Question
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Chapter 14, Problem 14.22E

1.

To determine

The allocation of fixed corporate overhead cost to three division use division margin as allocation base. Also compute each division operating margin percentage.

2.

To determine

The allocation of fixed corporate overhead cost to three division use allocation base as suggested by W. Also compute each division operating margin percentage.

3.

To determine

To discuss: The result of part 1 and 2, division performance incentive is based on operating margin percentage then which division is most receptive as per new allocation scheme and which one is on least stage.

4.

To determine

To explain: The allocation method opts by the company among the two calculated above and W overcome any objection that might arise from division.

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