Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 2012, are as follows:

The other corporate administrative expenses include officers’ salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Accounts Payable Department charges divisions for services, based on the number of checks issued. The usage of service by the two divisions is as follows:

The service department charges of the Tech Support Department and the Accounts Payable Department are considered controllable by the divisions. Corporate administrative expenses are not considered controllable by the divisions. The revenues, cost of goods sold, and operating expenses for the two divisions are as follows:

Prepare the divisional income statements for the twodivisions.

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Tech Support Department Accounts Payable Department Other corporate administrative expenses Total corporate expense 855,000 390,000 355,000 $1,600,000 Accounts Payable Wholesale Division Retail Division Total Tech Support 250 computers 500 750 computers 18,000 checks 12,000 30,000 checks Retail Revenues Cost of goods sold Operating expenses Wholesale $24,600,000 14,500,000 1,500,000 $13,750,000 8,000,000 400,000