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 $31,20$Y$7,$ are as follows:

Tech Support Department $$980,000$

Purchasing Department $365,000$

Other corporate administrative expenses $578,000$

Total corporate expense $$1,923,000$

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 $430$ computers $5,100$ purchase orders

Commercial Division $2709,500$

Total $700$ 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 $$8,579,000$ $$7,132,600$

Cost of goods sold $4,766,1003,601,600$

Operating expenses $1,682,8001,783,000$

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 $31,20$Y$7$

Consumer Division Commercial Division

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Income from operations before service department charges $fill in the blank $13$

$fill in the blank $14$

Service department charges:

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Total service department charges blank $fill in the blank $21$

blank $fill in the blank $22$

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