The following table shows National Paper Products' capital investment in each of its three divisions, and the most recent year's gross sales for each division. The operating costs of the head office for the year were $839,000. These costs are allocated to the divisions before each division's profit is determined. How much should be allocated to each division if the costs are prorated on the basis of:
a) The capital investment in each division?
b) The sales of each division?

Question

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The Answer of The following table shows National Paper Products' capital investment in each of its three divisions, and the most recent year's gross sales for each division. The operating costs of the head office for the year were $839,000. These costs are allocated to the divisions before each division's profit is determined. How much should be allocated to each division if the costs are prorated on the basis of:
a) The capital investment in each division?
b) The sales of each division?

The Following Table Shows National Paper Products' Capital Investment in Each