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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

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 $1,196,800
Purchasing Department 265,500
Other corporate administrative costs 629,000
Total corporate costs $2,091,300

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 420 computers 6,200 purchase orders
Commercial Division 260 11,500
Total 680 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 $9,786,800 $7,301,900
Cost of goods sold 5,437,100 3,687,100
Operating expenses 1,919,700 1,825,300

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

Cost of goods soldGross profitIncome from operationsOperating expensesRevenues

$- Select - $- Select -

Cost of goods soldGross lossGross profitIncome from operationsTech support department

- Select - - Select -

Gross profitIncome from operationsLoss from operationsOperating expensesRevenues

$- Select - $- Select -

Gross profitIncome from operationsLoss from operationsOperating expensesPurchasing department

- Select - - Select -
Income from operations before service department allocations $fill in the blank 13 $fill in the blank 14
Less service department cost allocations:

Cost of goods soldIncome from operationsOperating expensesRevenuesTech support department

$- Select - $- Select -

Gross profitIncome from operationsOperating expensesPurchasing departmentRevenues

- Select - - Select - - Select - - Select -

Gross profitIncome from operationsIncome from operations before service department allocationsLoss from operationsRevenues

$- Select - $- Select -

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