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 | $33,915,000 |
| SalesSummer Sports Division | 37,468,000 |
| Cost of Goods SoldWinter Sports Division | 20,349,000 |
| Cost of Goods SoldSummer Sports Division | 21,641,000 |
| Sales ExpenseWinter Sports Division | 5,814,000 |
| Sales ExpenseSummer Sports Division | 5,168,000 |
| Administrative ExpenseWinter Sports Division | 3,391,500 |
| Administrative ExpenseSummer Sports Division | 3,326,900 |
| Advertising Expense | 924,000 |
| Transportation Expense | 489,000 |
| Accounts Receivable Collection Expense | 280,800 |
| Warehouse Expense | 3,230,000 |
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, $434,000; Summer Sports Division, $490,000.
Transportation expensecharged back to divisions at a charge rate of $15 per bill of lading: Winter Sports Division, 15,500 bills of lading; Summer Sports Division, 17,100 bills of lading.
Accounts receivable collection expenseincurred at headquarters, charged back to divisions at a charge rate of $9 per invoice: Winter Sports Division, 14,400 sales invoices; Summer Sports Division, 16,800 sales invoices.
Warehouse expensecharged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 150,000 square feet; Summer Sports Division, 190,000 square feet.
Question Content Area
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
| Winter Sports Division | Summer Sports Division | |
| Sales | $fill in the blank 8b25080d0f9407c_1 | $fill in the blank 8b25080d0f9407c_2 |
| Cost of goods sold | fill in the blank 8b25080d0f9407c_3 | fill in the blank 8b25080d0f9407c_4 |
| Gross profit | $fill in the blank 8b25080d0f9407c_5 | $fill in the blank 8b25080d0f9407c_6 |
| Divisional selling and administrative expenses: | blank | blank |
| Divisional selling expenses | $fill in the blank 8b25080d0f9407c_7 | $fill in the blank 8b25080d0f9407c_8 |
| Divisional administrative expenses | fill in the blank 8b25080d0f9407c_9 | fill in the blank 8b25080d0f9407c_10 |
| Total divisional selling and administrative expenses | $fill in the blank 8b25080d0f9407c_11 | $fill in the blank 8b25080d0f9407c_12 |
| Income from operations before service department charges | $fill in the blank 8b25080d0f9407c_13 | $fill in the blank 8b25080d0f9407c_14 |
| Service department charges: | ||
| Advertising expense | $fill in the blank 8b25080d0f9407c_15 | $fill in the blank 8b25080d0f9407c_16 |
| Transportation expense | fill in the blank 8b25080d0f9407c_17 | fill in the blank 8b25080d0f9407c_18 |
| Accounts receivable collection expense | fill in the blank 8b25080d0f9407c_19 | fill in the blank 8b25080d0f9407c_20 |
| Warehouse expense | fill in the blank 8b25080d0f9407c_21 | fill in the blank 8b25080d0f9407c_22 |
| Total service department charges | $fill in the blank 8b25080d0f9407c_23 | $fill in the blank 8b25080d0f9407c_24 |
| Income from operations | $fill in the blank 8b25080d0f9407c_25 | $fill in the blank 8b25080d0f9407c_26 |
Question Content Area
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.
| Winter Sports Division | Summer Sports Division | Total | |
| Advertising expense | $fill in the blank 5a839ffa2064078_1 | $fill in the blank 5a839ffa2064078_2 | $fill in the blank 5a839ffa2064078_3 |
| Transportation rate per bill of lading | $fill in the blank 5a839ffa2064078_4 | $fill in the blank 5a839ffa2064078_5 | |
| Number of bills of lading | fill in the blank 5a839ffa2064078_6 | fill in the blank 5a839ffa2064078_7 | |
| Transportation expense | $fill in the blank 5a839ffa2064078_8 | $fill in the blank 5a839ffa2064078_9 | $fill in the blank 5a839ffa2064078_10 |
| Accounts receivable collection rate | $fill in the blank 5a839ffa2064078_11 | $fill in the blank 5a839ffa2064078_12 | |
| Number of sales invoices | fill in the blank 5a839ffa2064078_13 | fill in the blank 5a839ffa2064078_14 | |
| Accounts receivable collection expense | $fill in the blank 5a839ffa2064078_15 | $fill in the blank 5a839ffa2064078_16 | $fill in the blank 5a839ffa2064078_17 |
| Warehouse rate per sq. ft. | $fill in the blank 5a839ffa2064078_18 | $fill in the blank 5a839ffa2064078_19 | |
| Number of square feet | fill in the blank 5a839ffa2064078_20 | fill in the blank 5a839ffa2064078_21 | |
| Warehouse expense | $fill in the blank 5a839ffa2064078_22 | $fill in the blank 5a839ffa2064078_23 |
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Management Control Systems
Authors: Frank G.H. Hartmann Professor, Kalle Kraus, Göran Nilsson, Robert N. Anthony, Vijay Govindarajan
2nd Edition
1526848317, 978-1526848314
