Question
Profit Center Responsibility Reporting Glades Sporting Goods Co. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts
Profit Center Responsibility Reporting
Glades Sporting Goods Co. 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, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:
| SalesWinter Sports Division | $23,625,000 |
| SalesSummer Sports Division | 26,100,000 |
| Cost of Goods SoldWinter Sports Division | 14,175,000 |
| Cost of Goods SoldSummer Sports Division | 15,075,000 |
| Sales ExpenseWinter Sports Division | 4,050,000 |
| Sales ExpenseSummer Sports Division | 3,600,000 |
| Administrative ExpenseWinter Sports Division | 2,362,500 |
| Administrative ExpenseSummer Sports Division | 2,317,500 |
| Advertising Expense | 950,000 |
| Transportation Expense | 493,000 |
| Accounts Receivable Collection Expense | 194,600 |
| Warehouse Expense | 2,250,000 |
The bases to be used in allocating expenses, together with other essential information, are as follows:
- Advertising expenseincurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $446,000; Summer Sports Division, $504,000.
- Transportation expensecharged back to divisions at a charge rate of $17 per bill of lading: Winter Sports Division, 13,800 bills of lading; Summer Sports Division, 15,200 bills of lading.
- Accounts receivable collection expenseincurred at headquarters, charged back to divisions at a charge rate of $7 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices.
- Warehouse expensecharged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 130,000 square feet; Summer Sports Division, 170,000 square feet.
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
| Glades Sporting Goods Co. | ||
| Divisional Income Statements | ||
| For the Year Ended December 31, 20Y8 | ||
| Winter Sports Division | Summer Sports Division | |
| Sales | $fill in the blank 1b93ba0b7014013_1 | $fill in the blank 1b93ba0b7014013_2 |
| Cost of goods sold | fill in the blank 1b93ba0b7014013_3 | fill in the blank 1b93ba0b7014013_4 |
| Gross profit | $fill in the blank 1b93ba0b7014013_5 | $fill in the blank 1b93ba0b7014013_6 |
| Divisional selling and administrative expenses: | ||
| Divisional selling expenses | $fill in the blank 1b93ba0b7014013_7 | $fill in the blank 1b93ba0b7014013_8 |
| Divisional administrative expenses | fill in the blank 1b93ba0b7014013_9 | fill in the blank 1b93ba0b7014013_10 |
| Total divisional selling and administrative expenses | $fill in the blank 1b93ba0b7014013_11 | $fill in the blank 1b93ba0b7014013_12 |
| Income from operations before service department charges | $fill in the blank 1b93ba0b7014013_13 | $fill in the blank 1b93ba0b7014013_14 |
| Service department charges: | ||
| Advertising expense | $fill in the blank 1b93ba0b7014013_15 | $fill in the blank 1b93ba0b7014013_16 |
| Transportation expense | fill in the blank 1b93ba0b7014013_17 | fill in the blank 1b93ba0b7014013_18 |
| Accounts receivable collection expense | fill in the blank 1b93ba0b7014013_19 | fill in the blank 1b93ba0b7014013_20 |
| Warehouse expense | fill in the blank 1b93ba0b7014013_21 | fill in the blank 1b93ba0b7014013_22 |
| Total service department charges | $fill in the blank 1b93ba0b7014013_23 | $fill in the blank 1b93ba0b7014013_24 |
| Income from operations | $fill in the blank 1b93ba0b7014013_25 | $fill in the blank 1b93ba0b7014013_26 |
Provide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.
| Glades Sporting Goods Co. | |||
| Service Department Charges | |||
| For the Year Ended December 31, 20Y8 | |||
| Winter Sports Division | Summer Sports Division | Total | |
| Advertising expense | $fill in the blank 0d6f0208002affc_1 | $fill in the blank 0d6f0208002affc_2 | $fill in the blank 0d6f0208002affc_3 |
| Transportation rate per bill of lading | $fill in the blank 0d6f0208002affc_4 | $fill in the blank 0d6f0208002affc_5 | |
| Number of bills of lading | fill in the blank 0d6f0208002affc_6 | fill in the blank 0d6f0208002affc_7 | |
| Transportation expense | $fill in the blank 0d6f0208002affc_8 | $fill in the blank 0d6f0208002affc_9 | $fill in the blank 0d6f0208002affc_10 |
| Accounts receivable collection rate | $fill in the blank 0d6f0208002affc_11 | $fill in the blank 0d6f0208002affc_12 | |
| Number of sales invoices | fill in the blank 0d6f0208002affc_13 | fill in the blank 0d6f0208002affc_14 | |
| Accounts receivable collection expense | $fill in the blank 0d6f0208002affc_15 | $fill in the blank 0d6f0208002affc_16 | $fill in the blank 0d6f0208002affc_17 |
| Warehouse rate per sq. ft. | $fill in the blank 0d6f0208002affc_18 | $fill in the blank 0d6f0208002affc_19 | |
| Number of square feet | fill in the blank 0d6f0208002affc_20 | fill in the blank 0d6f0208002affc_21 | |
| Warehouse expense | $fill in the blank 0d6f0208002affc_22 | $fill in the blank 0d6f0208002affc_23 | $fill in the blank 0d6f0208002affc_24 |
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Managerial Accounting For Managers
Authors: Eric Noreen, Peter Brewer, Ray Garrison
6th Edition
1264100590, 9781264100590
