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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, 2017, are as follows: $1,097,400 Tech Support Department Purchasing Department Other corporate administrative expenses 231,000 571,000 Total corporate expense $1,899,400 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 380 computers 5,400 purchase orders Commercial Division 240 10,000 Total 620 computers 15,400 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 $8,862,500 $6,660,700 Cost of goods sold 4,923,600 3,363,300 Operating expenses 1,738,400 1,665,000 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, 2017 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 000 U Income from operations
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