Question
Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial
Championship Sports Inc. operates two divisionsthe 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: SalesWinter Sports Division $9,500,000 SalesSummer Sports Division 15,400,000 Cost of Goods SoldWinter Sports Division 4,400,000 Cost of Goods SoldSummer Sports Division 10,000,000 Sales ExpenseWinter Sports Division 770,000 Sales ExpenseSummer Sports Division 1,400,000 Administrative ExpenseWinter Sports Division 830,000 Administrative ExpenseSummer Sports Division 1,600,000 Advertising Expense 1,111,000 Transportation Expense 364,000 Accounts Receivable Collection Expense 207,000 Warehouse Expense 1,085,000 The bases to be used in allocating expenses, together with other information, are as follows: Advertising expenseincurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $316,000; Summer Sports Division, $795,000. Transportation expensecharged back to divisions at a charge rate of $7.00 per bill of lading: Winter Sports Division, 17,500 bills of lading; Summer Sports Division, 34,500 bills of lading. Accounts receivable collection expenseincurred at headquarters, charged back to divisions at a charge rate of $3.00 per invoice: Winter Sports Division, 27,000 sales invoices; Summer Sports Division, 42,000 sales invoices. Warehouse expensecharged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 62,000 square feet; Summer Sports Division, 93,000 square feet. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
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