What are the operating profits for each division considering

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Problem

Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions meet the requirements for segment disclosures. Before transactions between the two divisions are considered, revenues and costs are as follows:

                   Tours.                Resorts
Revenues   $ 35,286,000        $ 24,286,000
Costs            19,548,000       17,648,000

The two divisions have an arrangement by which Resorts gives coupons redeemable for tours and Tours gives discount coupons good for stays at a resort. The value of the coupons for the tours redeemed during the past year totaled $61 million. The discount coupons redeemed at the resorts totaled $3.0 million. As of the end of the year, all coupons for the current year expired. Get the instant assignment help.

Task

What are the operating profits for each division considering the effects of the costs arising from the joint agreement?

Reference no: EM134007951

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