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Divisional Income Statements with Service Department Charges Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The

Divisional Income Statements with Service Department Charges

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 $1,261,600
Purchasing Department 354,000
Other corporate administrative expenses 695,000
Total corporate expense $2,310,600

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 470 computers 6,200 purchase orders
Commercial Division 290 11,500
Total 760 computers 17,700 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 Commercial
Revenues $10,633,700 $8,244,000
Cost of goods sold 5,907,600 4,162,800
Operating expenses 2,085,800 2,060,800

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

Yozamba Technology
Divisional Income Statements
For the Year Ended December 31, 20Y7
Consumer Division Commercial Division
Revenues $ $
Cost of goods sold
Gross profit $ $
Operating expenses
Income from operations before service department charges $ $
Service department charges:
Tech support department $ $
Purchasing department
Total service department charges $ $
Income from operations $ $

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