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MetaLilac Group is organized into two geographic divisions $($Americas and Rest of the World, or ROW$)$ and a corporate headquarters. Late last year, the Lilac CFO prepared financial operating plans $($budgets$)$ for the two divisions for the current year, shown as follows:

Americas ROW

Revenues $ $67,500,000$ $ $82,500,000$

Direct division costs $54,000,00057,750,000$

Operating profit before allocation $ $13,500,000$ $ $24,750,000$

Corporate overhead costs are expected to be $$12\mathrm{.}4$ million in the current year. Of the $$12\mathrm{.}4$ million, $$8\mathrm{.}5$ million is fixed, and the remainder is variable, with respect to revenue. Division managers are evaluated and compensated in part on division operating profit relative to the budget.

Required:

Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated?

At the end of the current year, actual corporate costs incurred were $$13\mathrm{.}0$ million. Of the $$13\mathrm{.}0$ million, $$8\mathrm{.}6$ was fixed. Actual results in the two divisions are as follows:

Americas ROW

Revenues $ $67,050,000$ $ $100,575,000$

Direct costs $54,000,00070,403,000$

Operating profit before allocation $ $13,500,000$ $ $30,172,000$

What are the operating profits in each division for the current year after the corporate costs are allocated?

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