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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
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, $216,200; Summer Sports Division, $261,100. B. Transportation expense-charged back to divisions at a charge rate of $6 per bill of lading: Winter Sports Division, 12,300 bills of lading; Summer Sports Division, 15,100 bills of lading. C. Accounts receivable collection expense-incurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,650 sales invoices; Summer Sports Division, 14,410 sales invoices. D. Warehouse expense - charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 94,000 square feet; Summer Sports Division, 102,000 square feet. Required: 1. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the list of Labe/s and Amount Descriptions for the exact wording of the answer choices for text entries. (Complete the Supporting Calculations tab first.) A colon (:) will fill in where needed. 2. Provide supporting calculations for service department charges. Labels Divisional selling and administrative expenses Service department charges Amount Descriptions Accounts receivable collection expense Advertising expense Cost of goods sold Divisional administrative expenses Divisional selling expenses Gross profit Income from operations Income from operations before service departments charges Sales Total divisional selling and administrative expenses Total service department charges Transportation expense Warehouse expense 2. Provide supporting calculations for service department charges
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