Kraft Bowlen owns two sports franchises-the Bladers (a hockey team) and the Ballers (a basketball team). The
Question:
Kraft Bowlen owns two sports franchises-the Bladers (a hockey team) and the Ballers (a basketball team). The following information was provided for the coming year.
Bladers Ballers
Sales...................................$80,000,000..........$180,000,000
Variable cost of goods sold.........10,000,000.............30,000,000
Direct fixed overhead................20,000,000............100,000,000
A sales commission of 5% of sales revenue is paid for each of the two sports franchises. Direct fixed selling and administrative expense was estimated to be $4,000,000 for the Bladers franchise and $10,000,000 for the Ballers franchise.
Common fixed overhead associated with owning the franchises was estimated to be $18,000,000; common selling and administrative expense was estimated to be $8,000,000.
Required:
Prepare a segmented income statement for Kraft Bowlen for the coming year, using variable costing.
Step by Step Answer:
Managerial Accounting The Cornerstone of Business Decision Making
ISBN: 978-1337115773
7th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger