Problem $12-53($Static$)$ Dual and Single Allocation Rates $($LO $12-6)$

Burwell Manufacturing is organized into two divisions $($Agriculture and Mining$)$ and a corporate headquarters. The financial group of the corporate staff prepared financial operating plans $($budgets$)$ for the two divisions for the upcoming year $($year $1).$ Selected information from the plans is as follows:

Corporate overhead costs are expected to be $\backslash (\backslash$$ $3\mathrm{.}5\backslash )$ million in year $1.$ Of the $\backslash (\backslash$$ $3\mathrm{.}5\backslash )$ million, $\backslash (\backslash$$ $1\mathrm{.}25\backslash )$ million is fixed and the remainder is variable. Two$-$thirds of the variable cost is variable with respect to revenue. The other third is variable with respect to the number of full$-$time equivalent $($FTE$)$ employees. Division managers are evaluated and compensated in part on division operating profit $($including any allocated corporate costs$)$ relative to the budget. Corporate overhead at Burwell is allocated based on relative revenues to determine both budgeted and actual operating profit.

Required:

a$.$ What are the budgeted operating profits in each division for year $1$ after the corporate costs are allocated?

b$.$ At the end of year $1,$ actual corporate costs incurred were $\backslash (\backslash$$ $3\mathrm{.}7\backslash )$ million. Of the $\backslash (\backslash$$ $3\mathrm{.}7\backslash )$ million, $\backslash (\backslash$$ $1\mathrm{.}44\backslash )$ million was fixed, $\backslash (\backslash$$ $1\mathrm{.}3\backslash )$ million was variable with respect to revenues, and $\backslash (\backslash$$ $0\mathrm{.}96\backslash )$ million was variable with respect to FTEs. Actual division results in year $1,$ prior to any allocation, are as follows:

What are the actual $($reported$)$ operating profits in each division for year $1$ after the corporate costs are allocated?

Complete this question by entering your answers in the tabs below.

Required A

What are the budgeted operating profits in each division for year $1$ after the corporate costs are allocated?

Note: Do not round intermediate calculations. Enter your answers in thousands of dollars. Complete this question by entering your answers in the tabs below.

Required A

Required B

What are the actual $($reported$)$ operating profits in each division for year $1$ after the corporate costs are allocated?

Note: Do not round intermediate calculations. Enter your answers in thousands of dollars.