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: Line Item Description Amount Sales—Winter Sports Division $9,600,000 Sales—Summer Sports Division 15,000,000 Cost of Goods Sold—Winter Sports Division 5,500,000 Cost of Goods Sold—Summer Sports Division 9,500,000 Sales Expense—Winter Sports Division 780,000 Sales Expense—Summer Sports Division 1,000,000 Administrative Expense—Winter Sports Division 700,000 Administrative Expense—Summer Sports Division 1,440,000 Advertising Expense 1,099,000 Transportation Expense 150,000 Accounts Receivable Collection Expense 67,000 Warehouse Expense 966,000 The bases to be used in allocating expenses, together with other information, are as follows: Advertising expense—incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $398,000; Summer Sports Division, $701,000. Transportation expense—allocated to divisions at a rate of $3 per bill of lading: Winter Sports Division, 16,500 bills of lading; Summer Sports Division, 33,500 bills of lading. Accounts receivable collection expense—incurred at headquarters, allocated to divisions at a rate of $1 per invoice: Winter Sports Division, 26,000 sales invoices; Summer Sports Division, 41,000 sales invoices. Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 70,000 square feet; Summer Sports Division, 91,000 square feet. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your intermediate calculations. Line Item Description Winter Sports Division Summer Sports Division Sales $fill in the blank 2 $fill in the blank 3 Cost of goods sold fill in the blank 4 fill in the blank 5 Gross profit $fill in the blank 6 $fill in the blank 7 Divisional selling and administrative expenses: Divisional selling expenses $fill in the blank 8 $fill in the blank 9 Divisional administrative expenses fill in the blank 10 fill in the blank 11 Total divisional selling and administrative expenses $fill in the blank 12 $fill in the blank 13 Operating income before support department allocations $fill in the blank 14 $fill in the blank 15 Support department allocations: Advertising expense $fill in the blank 16 $fill in the blank 17 Transportation expense fill in the blank 18 fill in the blank 19 Accounts receivable collection expense fill in the blank 20 fill in the blank 21 Warehouse expense fill in the blank 22 fill in the blank 23 Total support department allocations $fill in the blank 24 $fill in the blank 25 Operating income $fill in the blank 26 $fill in the blank 27 Provide supporting computations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar. Line Item Description Winter Sports Division Summer Sports Division Total Advertising expense $fill in the blank 28 $fill in the blank 29 $fill in the blank 30 Transportation rate per bill of lading $fill in the blank 31 $fill in the blank 32 Number of bills of lading fill in the blank 33 fill in the blank 34 Transportation expense $fill in the blank 35 $fill in the blank 36 $fill in the blank 37 Accounts receivable collection rate $fill in the blank 38 $fill in the blank 39 Number of sales invoices fill in the blank 40 fill in the blank 41 Accounts receivable collection expense $fill in the blank 42 $fill in the blank 43 $fill in the blank 44 Warehouse rate per sq. ft. $fill in the blank 45 $fill in the blank 46 Number of square feet fill in the blank 47 fill in the blank 48 Warehouse expense $fill in the blank 49 $fill in the blank 50 $fill in the blank 51

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: Line Item Description Amount Sales—Winter Sports Division $9,600,000 Sales—Summer Sports Division 15,000,000 Cost of Goods Sold—Winter Sports Division 5,500,000 Cost of Goods Sold—Summer Sports Division 9,500,000 Sales Expense—Winter Sports Division 780,000 Sales Expense—Summer Sports Division 1,000,000 Administrative Expense—Winter Sports Division 700,000 Administrative Expense—Summer Sports Division 1,440,000 Advertising Expense 1,099,000 Transportation Expense 150,000 Accounts Receivable Collection Expense 67,000 Warehouse Expense 966,000 The bases to be used in allocating expenses, together with other information, are as follows: Advertising expense—incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $398,000; Summer Sports Division, $701,000. Transportation expense—allocated to divisions at a rate of $3 per bill of lading: Winter Sports Division, 16,500 bills of lading; Summer Sports Division, 33,500 bills of lading. Accounts receivable collection expense—incurred at headquarters, allocated to divisions at a rate of $1 per invoice: Winter Sports Division, 26,000 sales invoices; Summer Sports Division, 41,000 sales invoices. Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 70,000 square feet; Summer Sports Division, 91,000 square feet. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your intermediate calculations. Line Item Description Winter Sports Division Summer Sports Division Sales $fill in the blank 2 $fill in the blank 3 Cost of goods sold fill in the blank 4 fill in the blank 5 Gross profit $fill in the blank 6 $fill in the blank 7 Divisional selling and administrative expenses: Divisional selling expenses $fill in the blank 8 $fill in the blank 9 Divisional administrative expenses fill in the blank 10 fill in the blank 11 Total divisional selling and administrative expenses $fill in the blank 12 $fill in the blank 13 Operating income before support department allocations $fill in the blank 14 $fill in the blank 15 Support department allocations: Advertising expense $fill in the blank 16 $fill in the blank 17 Transportation expense fill in the blank 18 fill in the blank 19 Accounts receivable collection expense fill in the blank 20 fill in the blank 21 Warehouse expense fill in the blank 22 fill in the blank 23 Total support department allocations $fill in the blank 24 $fill in the blank 25 Operating income $fill in the blank 26 $fill in the blank 27 Provide supporting computations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar. Line Item Description Winter Sports Division Summer Sports Division Total Advertising expense $fill in the blank 28 $fill in the blank 29 $fill in the blank 30 Transportation rate per bill of lading $fill in the blank 31 $fill in the blank 32 Number of bills of lading fill in the blank 33 fill in the blank 34 Transportation expense $fill in the blank 35 $fill in the blank 36 $fill in the blank 37 Accounts receivable collection rate $fill in the blank 38 $fill in the blank 39 Number of sales invoices fill in the blank 40 fill in the blank 41 Accounts receivable collection expense $fill in the blank 42 $fill in the blank 43 $fill in the blank 44 Warehouse rate per sq. ft. $fill in the blank 45 $fill in the blank 46 Number of square feet fill in the blank 47 fill in the blank 48 Warehouse expense $fill in the blank 49 $fill in the blank 50 $fill in the blank 51

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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Question Content Area

Profit center responsibility reporting

Line Item Description	Amount
Sales—Winter Sports Division	$9,600,000
Sales—Summer Sports Division	15,000,000
Cost of Goods Sold—Winter Sports Division	5,500,000
Cost of Goods Sold—Summer Sports Division	9,500,000
Sales Expense—Winter Sports Division	780,000
Sales Expense—Summer Sports Division	1,000,000
Administrative Expense—Winter Sports Division	700,000
Administrative Expense—Summer Sports Division	1,440,000
Advertising Expense	1,099,000
Transportation Expense	150,000
Accounts Receivable Collection Expense	67,000
Warehouse Expense	966,000

The bases to be used in allocating expenses, together with other information, are as follows:

Advertising expense—incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $398,000; Summer Sports Division, $701,000.
Transportation expense—allocated to divisions at a rate of $3 per bill of lading: Winter Sports Division, 16,500 bills of lading; Summer Sports Division, 33,500 bills of lading.
Accounts receivable collection expense—incurred at headquarters, allocated to divisions at a rate of $1 per invoice: Winter Sports Division, 26,000 sales invoices; Summer Sports Division, 41,000 sales invoices.
Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 70,000 square feet; Summer Sports Division, 91,000 square feet.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your intermediate calculations.

Line Item Description	Winter Sports Division	Summer Sports Division
Sales	$fill in the blank 2	$fill in the blank 3
Cost of goods sold	fill in the blank 4	fill in the blank 5
Gross profit	$fill in the blank 6	$fill in the blank 7
Divisional selling and administrative expenses:
Divisional selling expenses	$fill in the blank 8	$fill in the blank 9
Divisional administrative expenses	fill in the blank 10	fill in the blank 11
Total divisional selling and administrative expenses	$fill in the blank 12	$fill in the blank 13
Operating income before support department allocations	$fill in the blank 14	$fill in the blank 15
Support department allocations:
Advertising expense	$fill in the blank 16	$fill in the blank 17
Transportation expense	fill in the blank 18	fill in the blank 19
Accounts receivable collection expense	fill in the blank 20	fill in the blank 21
Warehouse expense	fill in the blank 22	fill in the blank 23
Total support department allocations	$fill in the blank 24	$fill in the blank 25
Operating income	$fill in the blank 26	$fill in the blank 27

Provide supporting computations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.

Line Item Description	Winter Sports Division	Summer Sports Division	Total
Advertising expense	$fill in the blank 28	$fill in the blank 29	$fill in the blank 30
Transportation rate per bill of lading	$fill in the blank 31	$fill in the blank 32
Number of bills of lading	fill in the blank 33	fill in the blank 34
Transportation expense	$fill in the blank 35	$fill in the blank 36	$fill in the blank 37
Accounts receivable collection rate	$fill in the blank 38	$fill in the blank 39
Number of sales invoices	fill in the blank 40	fill in the blank 41
Accounts receivable collection expense	$fill in the blank 42	$fill in the blank 43	$fill in the blank 44
Warehouse rate per sq. ft.	$fill in the blank 45	$fill in the blank 46
Number of square feet	fill in the blank 47	fill in the blank 48
Warehouse expense	$fill in the blank 49	$fill in the blank 50	$fill in the blank 51

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