Homework Help is Here – Start Your Trial Now!
Business
Accounting
he centralized employee travel department of Bourgeois Company has costs of $405,600. The department has serviced a total of 3,900 travel reservations for the period. The South Division has made 2,260 reservations during the period, and the West Division has made 1,640 reservations. Additional data for the two divisions is following below:   South Division West Division Sales $3,150,470 $2,929,810 Cost of goods sold 1,638,240 1,669,990 Selling expenses 786,360 718,100

he centralized employee travel department of Bourgeois Company has costs of $405,600. The department has serviced a total of 3,900 travel reservations for the period. The South Division has made 2,260 reservations during the period, and the West Division has made 1,640 reservations. Additional data for the two divisions is following below:   South Division West Division Sales $3,150,470 $2,929,810 Cost of goods sold 1,638,240 1,669,990 Selling expenses 786,360 718,100

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
100%

The centralized employee travel department of Bourgeois Company has costs of $405,600. The department has serviced a total of 3,900 travel reservations for the period. The South Division has made 2,260 reservations during the period, and the West Division has made 1,640 reservations. Additional data for the two divisions is following below:

  South
Division		 West
Division
Sales $3,150,470 $2,929,810
Cost of goods sold 1,638,240 1,669,990
Selling expenses 786,360 718,100
**Divisional Income from Operations for Bourgeois Company** This section focuses on calculating the divisional income from operations for the South and West Divisions of Bourgeois Company. Below is a breakdown of the income statement components: 1. **Sales**: The total revenue generated by each division. 2. **Cost of Goods Sold (COGS)**: The direct costs attributable to the production of goods sold by each division. 3. **Gross Profit**: Calculated as Sales minus Cost of Goods Sold. It represents the profit a division makes after deducting the costs associated with producing the goods. 4. **Selling Expenses**: Expenses related to the selling of products, including costs like advertising and sales commissions. 5. **Income from Operations Before Service Department Allocations**: The operating income before accounting for any service department costs. 6. **Service Department Allocations**: These are allocated costs for services provided by other parts of the company, such as administration or IT services. 7. **Income from Operations**: The final profit figure after subtracting service department allocations from the income from operations before these allocations. **Instructions for Calculation:** - Evaluate and fill in the dollar figures for each category for both the South and West Divisions. - Subtract the Service Department allocations from the "Income from operations before service department allocations" to determine the final "Income from operations." **Note:** To ensure accuracy, use the provided "Check My Work" tool to review your calculations. **Feedback:** Attention is required to subtract the service department charges for a division from that division’s income from operations before incorporating such charges. Explore the interactive options to refine your understanding of divisional income calculations by clicking "Previous" or "Next" for additional practice problems.
Transcribed Image Text:**Divisional Income from Operations for Bourgeois Company** This section focuses on calculating the divisional income from operations for the South and West Divisions of Bourgeois Company. Below is a breakdown of the income statement components: 1. **Sales**: The total revenue generated by each division. 2. **Cost of Goods Sold (COGS)**: The direct costs attributable to the production of goods sold by each division. 3. **Gross Profit**: Calculated as Sales minus Cost of Goods Sold. It represents the profit a division makes after deducting the costs associated with producing the goods. 4. **Selling Expenses**: Expenses related to the selling of products, including costs like advertising and sales commissions. 5. **Income from Operations Before Service Department Allocations**: The operating income before accounting for any service department costs. 6. **Service Department Allocations**: These are allocated costs for services provided by other parts of the company, such as administration or IT services. 7. **Income from Operations**: The final profit figure after subtracting service department allocations from the income from operations before these allocations. **Instructions for Calculation:** - Evaluate and fill in the dollar figures for each category for both the South and West Divisions. - Subtract the Service Department allocations from the "Income from operations before service department allocations" to determine the final "Income from operations." **Note:** To ensure accuracy, use the provided "Check My Work" tool to review your calculations. **Feedback:** Attention is required to subtract the service department charges for a division from that division’s income from operations before incorporating such charges. Explore the interactive options to refine your understanding of divisional income calculations by clicking "Previous" or "Next" for additional practice problems.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Value Chain Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS