PROBLEM (26 POINTS) Tiny Tots Transit has 3 operating divisions Cam, Nate and Ash. Corporate headquarters in Tuscaloosa incurs $3,500,000 per period which the company considers as an indirect cost of the operating divisions. You, the Controller of Tiny Tots, have been asked to prepare a report that allocates the corporate headquarters using several different basis. Using the following information, calculate the operating margin of each division after allocating corporate headquarters costs on a Revenue, Direct Cost and number of employees basis. Please show all calculations.

CAM NATE ASH

Revenues 10,400,000 8,400,000 5,450,000

Direct Costs 6,800,000 5,760,000 4,954,000

Segment margin 3,600,000 2,640,000 496,000

Number of employees 2500 1500 1000