Wager Enterprises has four operating divisions: Tours, Hotels, Concerts, and Ticket Services. Each division is a separate

segment for financial reporting purposes. Revenues and costs related to outside transactions were as follows for the

past year $($dollars in thousands$)$:

Tours Division participates in a "frequent explorer" program with Hotels Division. During the past year, Tours reported

that it traded lodging award coupons for tours that had a retail value of $$890,000,$ assuming that the tours were

redeemed at full prices. Concerts Division offered $20$ percent discounts to Wager's tour customers and hotel guests.

These discounts to tour customers were estimated to have a retail value of $$280,000.$ Wager's hotel guests redeemed

$$600,000$ in concert discount coupons. The Hotels Division also provided rooms for employees of the Tours Division

$($drivers and guides$).$ The value of the rooms for the year was $$2\mathrm{.}4$ million.

Ticket Services Division sold tickets on behalf of Tours Division valued at $$360,000$ for the year. This service for

intracompany lodging was valued at $$200,000.$ It also sold concert tickets for Concerts; tickets for intracompany

concert admission were valued at $$120,000.$

While preparing all of these data for financial statement presentation, Tour Division's controller stated that the value of

the hotel rooms used for Tours Division employees should be based on their differential and opportunity costs, not on

the full price. This argument was based on the fact that the hotel rooms are usually those that would otherwise be

empty or sold at a discount. If the differential and opportunity costs were used for this transfer price, the value would be

$$500,000$ instead of $$2\mathrm{.}4$ million. Hotel Division's controller made a similar argument concerning the concert discount

coupons. If the differential cost basis were used for the concert coupons, the transfer price would be $$120,000$ instead

of $$600,000.$

Wager Enterprises reports assets in each division as follows $($dollars in thousands$)$:

Required:

b$.$ What are the operating profits for each Wager Enterprises division using the differential cost basis for pricing

transfers?

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req B

Req C$2$

What are the operating profits for each Wager Enterprises division using the differential

cost basis for pricing transfers?

Note: Enter your answers in thousands of dollars.

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