ACCOUNTING,CHAP.1-13
26th Edition
ISBN: 9781305088412
Author: WARREN
Publisher: CENGAGE L
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Chapter 24, Problem 24.9EX
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
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.
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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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
Sales-Summer Sports Division
Cost of Goods Sold-Winter Sports Division
Cost of Goods Sold-Summer Sports Division
Sales Expense-Winter Sports Division
Sales Expense-Summer Sports Division
Administrative Expense-Winter Sports Division
Administrative Expense-Summer Sports Division
Advertising Expense
Transportation Expense
$36,907,500
40,774,000
22,144,500
23,550,500
6,327,000
5,624,000
3,690,800
3,620,500
935,000
447,000
228,800
3,515,000
Accounts Receivable Collection Expense
Warehouse Expense
The bases to be used in allocating expenses, together with other information, are as follows:
a. Advertising…
=
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
including those for inventories, were recorded and posted:
Sales-Winter Sports Division
Sales-Summer Sports Division
Cost of Goods Sold-Winter Sports Division
Cost of Goods Sold-Summer Sports Division
Sales Expense-Winter Sports Division
Sales Expense-Summer Sports Division
Administrative Expense-Winter Sports Division
Administrative Expense-Summer Sports Division
Advertising Expense
Transportation Expense
Accounts Receivable Collection Expense
Warehouse Expense
Sales
$29,925,000
33,060,000
17,955,000
19,095,000
5,130,000
4,560,000
Cost of goods sold
Gross profit
Divisional selling and administrative expenses:
2,992,500
2,935,500
1,091,000
Divisional selling expenses
Divisional administrative expenses…
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
$22,785,000
Sales-Summer Sports Division
25,172,000
Cost of Goods Sold-Winter Sports Division
13,671,000
Cost of Goods Sold-Summer Sports Division
14,539,000
Sales Expense-Winter Sports Division
3,906,000
Sales Expense-Summer Sports Division
3,472,000
Administrative Expense-Winter Sports Division
2,278,500
Administrative Expense-Summer Sports Division
2,235,100
Advertising Expense
941,000
Transportation Expense
411,600
Accounts Receivable Collection Expense
253,800
Warehouse Expense
2,170,000
The bases to be used in allocating expenses, together with other information, are as follows:
a. Advertising…
Chapter 24 Solutions
ACCOUNTING,CHAP.1-13
Ch. 24 - Differentiate between centralized and...Ch. 24 - Differentiate between a profit center and an...Ch. 24 - Prob. 3DQCh. 24 - What is the major shortcoming of using income from...Ch. 24 - In a decentralized company in which the divisions...Ch. 24 - How does using the return on investment facilitate...Ch. 24 - Why would a firm use a balanced scorecard in...Ch. 24 - What is the objective of transfer pricing?Ch. 24 - When is the negotiated price approach preferred...Ch. 24 - When using the negotiated price approach to...
Ch. 24 - Budgetary performance for cost center Caroline...Ch. 24 - Budgetary performance for cost center Conley...Ch. 24 - Prob. 24.2APECh. 24 - Prob. 24.2BPECh. 24 - Prob. 24.3APECh. 24 - Prob. 24.3BPECh. 24 - Profit margin, investment turnover, and ROI Cash...Ch. 24 - Profit margin, investment turnover and ROI Briggs...Ch. 24 - Prob. 24.5APECh. 24 - Residual income The Commercial Division of Herring...Ch. 24 - Transfer pricing The materials used by the North...Ch. 24 - Transfer pricing The materials used by the...Ch. 24 - Budget performance reports for cost centers...Ch. 24 - Prob. 24.2EXCh. 24 - Prob. 24.3EXCh. 24 - Prob. 24.4EXCh. 24 - Service department charges In divisional income...Ch. 24 - Service department charges and activity bases...Ch. 24 - Divisional income statements with service...Ch. 24 - Prob. 24.8EXCh. 24 - Profit center responsibility reporting XSport...Ch. 24 - Rate of return on investment The income from...Ch. 24 - Prob. 24.11EXCh. 24 - Determining missing items in return computation...Ch. 24 - Profit margin, investment turnover, and rate of...Ch. 24 - Prob. 24.14EXCh. 24 - Determining missing items in return and residual...Ch. 24 - Determining missing items from computations Data...Ch. 24 - Prob. 24.17EXCh. 24 - Balanced scorecard for a service company American...Ch. 24 - Building a balanced scorecard Hit-n-Kun Inc. owns...Ch. 24 - Decision on transfer pricing Materials used by the...Ch. 24 - Prob. 24.21EXCh. 24 - Budget performance report for a cost center...Ch. 24 - Prob. 24.2APRCh. 24 - Prob. 24.3APRCh. 24 - Effect of proposals on divisional performance A...Ch. 24 - Divisional performance analysis and evaluation The...Ch. 24 - Prob. 24.6APRCh. 24 - Budget performance report for a cost center The...Ch. 24 - Prob. 24.2BPRCh. 24 - Prob. 24.3BPRCh. 24 - Effect of proposals on divisional performance A...Ch. 24 - Divisional performance analysis and evaluation The...Ch. 24 - Prob. 24.6BPRCh. 24 - Prob. 24.1CPCh. 24 - Prob. 24.2CPCh. 24 - Evaluating divisional performance The three...Ch. 24 - Prob. 24.4CPCh. 24 - Evaluating division performance Last Resort...
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