Financial & Managerial Accounting, Loose-Leaf Version
14th Edition
ISBN: 9781337270700
Author: Carl S. Warren, James M. Reeve, Jonathan Duchac
Publisher: South-Western College Pub
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Textbook Question
Chapter 23, Problem 23.9EX
Profit center responsibility reporting
XSport Sporting Goods Co. 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.......................................... | $10,500,000 |
Sales—Summer Sports Division........................................ | 13,600,000 |
Cost of Goods Sold—Winter Sports Division ............................ | 6,300,000 |
Cost of Goods Sold—Summer Sports Division........................... | 7,888,000 |
Sales Expense—Winter Sports Division ................................. | 1,680,000 |
Sales Expense—Summer Sports Division ............................... | 1,904,000 |
Administrative Expense—Winter Sports Division........................ | 1,050,000 |
Administrative Expense—Summer Sports Division....................... | 1,210,400 |
Advertising Expense .................................................. | 482,000 |
Transportation Expense ............................................... | 240,000 |
120,500 | |
Warehouse Expense................................................... | 1,200,000 |
The bases to be used in allocating expenses, together with other essential information, are as follows:
- A. Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $216,900; Summer Sports Division, $265,100.
- B. Transportation expense—charged back to divisions at a charge rate of $8.00 per bill of lading: Winter Sports Division, 14,400 bills of lading; Summer Sports Division, 15,600 bills of lading.
- C. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $5.00 per invoice: Winter Sports Division. 9,640 sales invoices; Summer Sports Division, 14,460 sales invoices.
- D. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division. 94,000 square feet; Summer Sports Division, 106,000 square feet.
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Provide supporting calculations for service department charges.
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Chapter 23 Solutions
Financial & Managerial Accounting, Loose-Leaf Version
Ch. 23 - Prob. 1DQCh. 23 - Differentiate between a profit center and an...Ch. 23 - Weyerhaeuser developed a system that assigns...Ch. 23 - What is the major shortcoming of using income from...Ch. 23 - In a decentralized company in which the divisions...Ch. 23 - How does using the return on investment facilitate...Ch. 23 - Why would a firm use a balanced scorecard in...Ch. 23 - Prob. 8DQCh. 23 - When is the negotiated price approach preferred...Ch. 23 - When using the negotiated price approach to...
Ch. 23 - Budgetary performance for cost center Vinton...Ch. 23 - Service department charges The centralized...Ch. 23 - Income from operations for profit center Using the...Ch. 23 - Profit margin, investment turnover, and ROI Briggs...Ch. 23 - Residual income The Commercial Division of Galena...Ch. 23 - Transfer pricing The materials used by the...Ch. 23 - Budget performance reports for cost centers...Ch. 23 - Divisional income statements The following data...Ch. 23 - Service department charges and activity bases For...Ch. 23 - Service department charges In divisional income...Ch. 23 - Service department charges and activity bases...Ch. 23 - Divisional income statements with service...Ch. 23 - Prob. 23.8EXCh. 23 - Profit center responsibility reporting XSport...Ch. 23 - Return on investment The income from operations...Ch. 23 - Prob. 23.11EXCh. 23 - Determining missing items in return on investment...Ch. 23 - Profit margin, investment turnover, and return on...Ch. 23 - Prob. 23.14EXCh. 23 - Prob. 23.15EXCh. 23 - Determining missing items from computations Data...Ch. 23 - Prob. 23.17EXCh. 23 - Building a balanced scorecard Hit-n-Run Inc. owns...Ch. 23 - Decision on transfer pricing Materials used by the...Ch. 23 - Prob. 23.20EXCh. 23 - Prob. 23.1APRCh. 23 - Profit center responsibility reporting for a...Ch. 23 - Divisional income statements and return on...Ch. 23 - Effect of proposals on divisional performance A...Ch. 23 - Divisional performance analysis and evaluation The...Ch. 23 - Prob. 23.6APRCh. 23 - Budget performance report for a cost center The...Ch. 23 - Profit center responsibility reporting for a...Ch. 23 - Divisional income statements and return on...Ch. 23 - Effect of proposals on divisional performance A...Ch. 23 - Divisional performance analysis and evaluation The...Ch. 23 - Prob. 23.6BPRCh. 23 - Prob. 1ADMCh. 23 - Domino's Pizza: Franchise segment return on...Ch. 23 - Prob. 3ADMCh. 23 - Prob. 23.1TIFCh. 23 - Prob. 23.3TIF
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