Profit Center Responsibility Reporting 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, 2049, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division $32,550,000 35,960,000 Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division 19,530,000 Cost of Goods Sold-Summer Sports Division 20,770,000 Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division 5,580,000 4,960,000 3,255,000 Administrative Expense-Summer Sports Division 3,193,000 Advertising Expense 1,076,000 Transportation Expense 435,000 Accounts Receivable Collection Expense 222,400 Warehouse Expense 3,100,000 The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expense-incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $505,000; Summer Sports Division, $571,000. b. Transportation expense-allocated to divisions at a rate of $15 per bill of lading: Winter Sports Division, 13,800 bills of lading; Summer Sports Division, 15,200 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, allocated to divisions at a rate of $8 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices. d. Warehouse expense-allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 180,000 square feet; Summer Sports Division, 220,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations. Championship Sports Inc. Divisional Income Statements For the Year Ended December 31, 2019 Winter Sports Division Summer Sports Division Sales $ 32,550,000 35,960,000 Cost of goods sold 19,530,000 20,770,000 13,020,000 15,190,000 Gross profit Divisional selling and administrative expenses: Divisional selling expenses 5,580,000 4,960,000 Divisional administrative expenses 3,255,000 3,193,000 Total divisional selling and administrative expenses 8,835,000 8,153,000 Operating income before support department allocations 7,037,000 Support department allocations: Advertising expense $ 505,000 571,000 Transportation expense 207,000 228,000 Accounts receivable collection expense 222,400 X 222,400 x Warehouse expense 3,100,000 X 3,100,000 X Total support department allocations $ Operating income Feedback Provide supporting schedules for determining 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, 2019 Winter Sports Division Summer Sports Division Total Advertising expense 3,255,000 x 3,193,000 X S 6,448,000 X Transportation rate per bill of lading 15 15 Number of bills of lading 13,800 15,200 Transportation expense $ 207,000 $ 228,000 435,000 Accounts receivable collection rate 8 $ 8 Number of sales invoices 12,800 15,000 Accounts receivable collection expense 102,400 120,000 222,400 Warehouse rate per sq. ft. Number of square feet 180,000 220,000 Warehouse expense 3,100,000 X $ 3,100,000 X 6,200,000 X Feedback Feedback
