Question: 17. Eagle Corporation has three divisions: E1, T2, and B3. Corporate overhead is currently allocated to divisions based on Division Segment Margin. The following information

17. Eagle Corporation has three divisions: E1, T2, and B3. Corporate overhead is currently allocated to divisions based on Division Segment Margin.

The following information is available for the current year: E1, T2, and B3 respectively:

Revenue $685,000. $438,000. $550,000

Segment Margin $205,500. $219,000 .$220,000

Administrative Costs $ 60,000. $ 44,000. $ 96,000

Number of Employees: 95. 570. 285

Floor Space (sq. ft.) 1,200. 1,440. 2,160

Eagle Corporations current year corporate overhead costs include the following:

Department Cost Allocation Base Human Resources $102,000 Number of employees

Facilities $187,000 Floor space

Corporate Administrative $ 56,000 Division administrate cost

Total $345,000

a. Allocate the corporate overhead costs to divisions E1, T2 and B3 respectively, based on an ABC allocation system that utilizes better cause and effect of resource consumption and allocated cost. Also provide total corporate overhead costs allocated by division.

b. Why is the allocation of corporate overhead cost included as part of our study of Strategic Performance Measurement?

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