Grand Amusements, Inc. (GAI) has two operating divisions, Parks and Foods. The two divisions have a marketing agreement to provide incentives to customers. Parks Division offers vouchers good for meals at the restaurants of Foods Division, and Foods Division offers coupons for discounted admission at Parks Division amusement parks. Annual profits are $16.8 million. The two divisions meet the requirements for segment disclosures. Before the transactions are considered, revenues and costs (in thousands of dollars) for the two divisions are as follows: Parks Foods Revenue $21,000 $36,000 Costs ? ? Profit ? ? After adjusting appropriately for the effect of the marketing agreement, the revenues and costs are as follows: Parks Foods Revenue ? ? Costs $18,900 ? Profit ? $13,200 The value of the vouchers issued by the Foods Division was 150 percent the value of the coupons issued by the Parks Division. Required What was the value of the coupons issued by Parks Division? By Foods Division?

Grand Amusements, Inc. (GAI) has two operating divisions, Parks and Foods. The two divisions have a marketing agreement to provide incentives to customers. Parks Division offers vouchers good for meals at the restaurants of Foods Division, and Foods Division offers coupons for discounted admission at Parks Division amusement parks. Annual profits are $16.8 million. The two divisions meet the requirements for segment disclosures. Before the transactions are considered, revenues and costs (in thousands of dollars) for the two divisions are as follows: Parks Foods Revenue $21,000 $36,000 Costs ? ? Profit ? ? After adjusting appropriately for the effect of the marketing agreement, the revenues and costs are as follows: Parks Foods Revenue ? ? Costs $18,900 ? Profit ? $13,200 The value of the vouchers issued by the Foods Division was 150 percent the value of the coupons issued by the Parks Division. Required What was the value of the coupons issued by Parks Division? By Foods Division?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 18E

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11. Subject :- Accounting
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