Profit center responsibility reporting
Glades 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 | $12,600,000 |
Sales—Summer Sports Division | 16,300,000 |
Cost of Goods Sold—Winter Sports Division | 7,560,000 |
Cost of Goods Sold—Summer Sports Division | 9,454,000 |
Sales Expense—Winter Sports Division | 2,016,000 |
Sales Expense—Summer Sports Division | 2,282,000 |
Administrative Expense—Winter Sports Division | 1,260,000 |
Administrative Expense—Summer Sports Division | 1.450,700 |
Advertising Expense | 578,000 |
Transportation Expense | 265,660 |
174,000 | |
Warehouse Expense | 1,540,000 |
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, $252,000; Summer Sports Division, $326,000.
b. Transportation expense—charged back to divisions at a charge rate of $7.40 per bill of lading: Winter Sports Division, 17,200 bills of lading; Summer Sports Division, 18,700 bills of lading.
c. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $6.00 per invoice: Winter Sports Division, 11,500 sales invoices; Summer Sports Division, 17,500 sales invoices.
d. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 102,000 square feet; Summer Sports Division, 118,000 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 $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…arrow_forwardProfit Center Responsibility Reporting Glades 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 trial balance as of December 31, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $31,920,000 Sales—Summer Sports Division 35,264,000 Cost of Goods Sold—Winter Sports Division 19,152,000 Cost of Goods Sold—Summer Sports Division 20,368,000 Sales Expense—Winter Sports Division 5,472,000 Sales Expense—Summer Sports Division 4,864,000 Administrative Expense—Winter Sports Division 3,192,000 Administrative Expense—Summer Sports Division 3,131,200 Advertising Expense 1,025,000 Transportation Expense 400,400 Accounts Receivable Collection Expense 245,700 Warehouse Expense 3,040,000 The bases to be used in allocating expenses, together with other essential…arrow_forwardProfit 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 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 $29,295,000 Sales—Summer Sports Division 32,364,000 Cost of Goods Sold—Winter Sports Division 17,577,000 Cost of Goods Sold—Summer Sports Division 18,693,000 Sales Expense—Winter Sports Division 5,022,000 Sales Expense—Summer Sports Division 4,464,000 Administrative Expense—Winter Sports Division 2,929,500 Administrative Expense—Summer Sports Division 2,873,700 Advertising Expense 1,012,000 Transportation Expense 435,000 Accounts Receivable Collection Expense 250,200 Warehouse Expense 2,790,000 The bases to be used in allocating expenses, together with other essential…arrow_forward
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