Question
Divisional Income Statements with Service Department Charges Grael Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The
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Divisional Income Statements with Service Department Charges
Grael Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows:
Tech Support Department $1,036,800 Purchasing Department 219,000 Other corporate administrative expenses 540,000 Total corporate expense $1,795,800 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 Purchasing Department charges 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 5,100 purchase orders Commercial Division 310 9,500 Total 810 computers 14,600 purchase orders The service department charges of the Tech Support Department and the Purchasing 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:
Consumer Commercial Revenues $8,426,300 $6,249,500 Cost of goods sold 4,681,300 3,155,700 Operating expenses 1,652,800 1,562,200 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 Gross profitIncome from operationsOperating expensesRevenues
$- Select - $- Select - Cost of goods soldGross profitIncome from operationsTech support department
- Select - - Select - Gross profitLoss from operationsOperating expensesRevenues
$- Select - $- Select - Income from operationsLoss from operationsOperating expensesPurchasing department
- Select - - Select - Income from operations before service department charges $fill in the blank 13 $fill in the blank 14 Less service department charges: Cost of goods soldIncome from operationsOperating expensesTech Support department
$- Select - $- Select - Gross profitIncome from operationsOperating expensesPurchasing department
- Select - - Select - - Select - - Select - Gross profitIncome from operationsIncome from operations before service department chargesLoss from operations
$- Select - $- Select -
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