Divisional income statements with service department charges Instructions Label and Amount Descriptions Divisional Income Statements Instructions Yozamba 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 $567,000 Purchasing Department 96,900 Other corporate administrative expenses Total corporate expense 590,000 $1,253,900 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: Consumer Division Tech Support Purchasing 360 computers 1,990 purchase orders Commercial Division 270 Total 3,710 630 computers 5,700 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 Revenues $7,440,000 Commercial $6,189,000 Cost of goods sold 4,112,000 3,119,500 Previous Next