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 $8,900,000 Sales—Summer Sports Division 16,400,000 Cost of Goods Sold—Winter Sports Division 5,000,000 Cost of Goods Sold—Summer Sports Division 9,000,000 Sales Expense—Winter Sports Division 650,000
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
Sales—Winter Sports Division | $8,900,000 |
Sales—Summer Sports Division | 16,400,000 |
Cost of Goods Sold—Winter Sports Division | 5,000,000 |
Cost of Goods Sold—Summer Sports Division | 9,000,000 |
Sales Expense—Winter Sports Division | 650,000 |
Sales Expense—Summer Sports Division | 1,200,000 |
Administrative Expense—Winter Sports Division | 800,000 |
Administrative Expense—Summer Sports Division | 1,450,000 |
Advertising Expense | 1,090,000 |
Transportation Expense | 192,000 |
Accounts Receivable Collection Expense | 68,000 |
Warehouse Expense | 1,800,000 |
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, $375,000; Summer Sports Division, $715,000.
- Transportation expense—allocated to divisions at a rate of $4.00 per bill of lading: Winter Sports Division, 17,500 bills of lading; Summer Sports Division, 30,500 bills of lading.
- Accounts receivable collection expense—incurred at headquarters, allocated to divisions at a rate of $1.00 per invoice: Winter Sports Division, 25,000 sales invoices; Summer Sports Division, 43,000 sales invoices.
- Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 60,000 square feet; Summer Sports Division, 90,000 square feet.
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Round your interim calculations to two decimal places, if required.
Championship Sports Inc. | ||
Divisional Income Statements | ||
For the Year Ended December 31, 20Y9 | ||
Winter Sports Division | Summer Sports Division | |
Sales | $fill in the blank 5552cc076ffd069_1 | $fill in the blank 5552cc076ffd069_2 |
Cost of goods sold | fill in the blank 5552cc076ffd069_3 | fill in the blank 5552cc076ffd069_4 |
Gross profit | $fill in the blank 5552cc076ffd069_5 | $fill in the blank 5552cc076ffd069_6 |
Divisional selling and administrative expenses: | ||
Divisional selling expenses | $fill in the blank 5552cc076ffd069_7 | $fill in the blank 5552cc076ffd069_8 |
Divisional administrative expenses | fill in the blank 5552cc076ffd069_9 | fill in the blank 5552cc076ffd069_10 |
Total divisional selling and administrative expenses | $fill in the blank 5552cc076ffd069_11 | $fill in the blank 5552cc076ffd069_12 |
Operating income before support department allocations | $fill in the blank 5552cc076ffd069_13 | $fill in the blank 5552cc076ffd069_14 |
Support department allocations: | ||
Advertising expense | $fill in the blank 5552cc076ffd069_15 | $fill in the blank 5552cc076ffd069_16 |
Transportation expense | fill in the blank 5552cc076ffd069_17 | fill in the blank 5552cc076ffd069_18 |
Accounts receivable collection expense | fill in the blank 5552cc076ffd069_19 | fill in the blank 5552cc076ffd069_20 |
Warehouse expense | fill in the blank 5552cc076ffd069_21 | fill in the blank 5552cc076ffd069_22 |
Total support department allocations | $fill in the blank 5552cc076ffd069_23 | $fill in the blank 5552cc076ffd069_24 |
Operating income | $fill in the blank 5552cc076ffd069_25 | $fill in the blank 5552cc076ffd069_26 |
Provide supporting calculations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.
Championship Sports Inc. | |||
Support Department Allocations | |||
For the Year Ended December 31, 20Y9 | |||
Winter Sports Division | Summer Sports Division | Total | |
Advertising expense | $fill in the blank e0ba860cbfc203e_1 | $fill in the blank e0ba860cbfc203e_2 | $fill in the blank e0ba860cbfc203e_3 |
Transportation rate per bill of lading | $fill in the blank e0ba860cbfc203e_4 | $fill in the blank e0ba860cbfc203e_5 | |
Number of bills of lading | fill in the blank e0ba860cbfc203e_6 | fill in the blank e0ba860cbfc203e_7 | |
Transportation expense | $fill in the blank e0ba860cbfc203e_8 | $fill in the blank e0ba860cbfc203e_9 | $fill in the blank e0ba860cbfc203e_10 |
Accounts receivable collection rate | $fill in the blank e0ba860cbfc203e_11 | $fill in the blank e0ba860cbfc203e_12 | |
Number of sales invoices | fill in the blank e0ba860cbfc203e_13 | fill in the blank e0ba860cbfc203e_14 | |
Accounts receivable collection expense | $fill in the blank e0ba860cbfc203e_15 | $fill in the blank e0ba860cbfc203e_16 | $fill in the blank e0ba860cbfc203e_17 |
Warehouse rate per sq. ft. | $fill in the blank e0ba860cbfc203e_18 | $fill in the blank e0ba860cbfc203e_19 | |
Number of square feet | fill in the blank e0ba860cbfc203e_20 | fill in the blank e0ba860cbfc203e_21 | |
Warehouse expense | $fill in the blank e0ba860cbfc203e_22 | $fill in the blank e0ba860cbfc203e_23 | $fill in the blank e0ba860cbfc203e_24 |
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