Management requests departmental income statements for Hacker’s Haven, a computer store that has five departments. Three are operating departments (hardware, software, and repairs) and two are service departments (general office and purchasing).

The departments incur several indirect expenses. To prepare departmental income statements, the indirect expenses must be allocated across the five departments. Then the expenses of the two service departments must be allocated to the three operating departments. Total cost amounts and the allocation bases for each indirect expense follow.

The following additional information is needed for indirect expense allocations

Required 1. Prepare a departmental expense allocation spreadsheet for Hacker’s Haven.
2. Prepare a departmental income statement reporting net income for each operating department and for all operating departments combined.

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Sales.. Cost of goods sold Direct expenses Payroll Depreciation Supplies General Office Purchasing Hardware Software Repairs $960,000 500,000 $600,000 $840,000 300,000 200,000 $60,000 $45,000 80,000 25,000 325,000 6,000 7,200 33,000 4,200 9,600 15,000 10,000 10,000 2,000 25,000