Profit Center Responsibility Reporting Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division $22,785,000 Sales-Summer Sports Division 25,172,000 Cost of Goods Sold-Winter Sports Division 13,671,000 Cost of Goods Sold-Summer Sports Division 14,539,000 Sales Expense-Winter Sports Division 3,906,000 Sales Expense-Summer Sports Division 3,472,000 Administrative Expense-Winter Sports Division 2,278,500 Administrative Expense-Summer Sports Division 2,235,100 Advertising Expense 941,000 Transportation Expense 411,600 Accounts Receivable Collection Expense 253,800 Warehouse Expense 2,170,000 The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expense-incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $442,000; Summer Sports Division, $499,000. b. Transportation expense-allocated to divisions at a rate of $14 per bill of lading: Winter Sports Division, 14,000 bills of lading; Summer Sports Division, 15,400 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, allocated to divisions at a rate of $9 per invoice: Winter Sports Division, 13,000 sales invoices; Summer Sports Division, 15,200 sales invoices. d. Warehouse expense-allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
Profit Center Responsibility Reporting Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division $22,785,000 Sales-Summer Sports Division 25,172,000 Cost of Goods Sold-Winter Sports Division 13,671,000 Cost of Goods Sold-Summer Sports Division 14,539,000 Sales Expense-Winter Sports Division 3,906,000 Sales Expense-Summer Sports Division 3,472,000 Administrative Expense-Winter Sports Division 2,278,500 Administrative Expense-Summer Sports Division 2,235,100 Advertising Expense 941,000 Transportation Expense 411,600 Accounts Receivable Collection Expense 253,800 Warehouse Expense 2,170,000 The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expense-incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $442,000; Summer Sports Division, $499,000. b. Transportation expense-allocated to divisions at a rate of $14 per bill of lading: Winter Sports Division, 14,000 bills of lading; Summer Sports Division, 15,400 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, allocated to divisions at a rate of $9 per invoice: Winter Sports Division, 13,000 sales invoices; Summer Sports Division, 15,200 sales invoices. d. Warehouse expense-allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 9E: Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports...
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