Ferntree Experiences has two operating divisions, Winery and Restaurant. The two divisions have a marketing agreement to
Question:
Ferntree Experiences has two operating divisions, Winery and Restaurant. The two divisions have a marketing agreement to provide incentives to customers. The Winery division offers coupons good for meals at the restaurants and the Restaurant division offers coupons good for wine tastings and purchases. Annual profits are $72 million. The two divisions meet the requirements for segment disclosures.
Before the transactions are considered, revenues and costs (in thousands of dollars) for the two divisions are as follows.
Winery Restaurant
Revenue $80,000 $40,000
Costs ? ?
Profit ? ?
After adjusting appropriately for the effect of the marketing agreement, the revenues and costs are as follows.
Winery Restaurant
Revenues ? ?
Costs ? $14,800
Profit$ 11,400 ?
The value of the coupons issued by the Restaurant Division was double the value of the coupons issued by the Winery Division.
Required:
What was the value of the coupons issued by the Winery Division? By the Restaurant Division?(Enter your answers in whole dollars not in thousands of dollars.)