Divisional Income Statements with Service Department Allocations

Grael Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate costs for the year ended December 31, 20Y7, are as follows:

Tech Support Department	$1,036,800
Purchasing Department	354,000
Other corporate administrative costs	598,000
Total corporate costs	$1,988,800

The other corporate administrative costs include officers salaries and miscellaneous smaller costs required by the corporation. The Tech Support Department allocates the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department allocates divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows:

	Tech Support		Purchasing
Consumer Division	500	computers	6,200	purchase orders
Commercial Division	310		11,500
Total	810	computers	17,700	purchase orders

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

	Consumer		Commercial
Revenues	$8,984,900		$7,263,500
Cost of goods sold	4,991,600		3,667,700
Operating expenses	1,762,400		1,815,700

Prepare the divisional income statements for the two divisions. Do not round your interim calculations.

GRAEL TECHNOLOGY
Divisional Income Statements
For the Year Ended December 31, 20Y7
		Consumer Division		Commercial Division
Revenues		$fill in the blank 2		$fill in the blank 3
Cost of goods sold		fill in the blank 5		fill in the blank 6
Gross profit		$fill in the blank 8		$fill in the blank 9
Operating expenses		fill in the blank 11		fill in the blank 12
Income from operations before service department allocations		$fill in the blank 13		$fill in the blank 14
Less service department cost allocations:
Tech support department	$fill in the blank 16		$fill in the blank 17
Purchasing department	fill in the blank 19	fill in the blank 20	fill in the blank 21	fill in the blank 22
Income from operations		$fill in the blank 24		$fill in the blank 25