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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 Purchasing Department Other corporate administrative expenses Total corporate expense $960,000 372,500 573,000 $1,905,500 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 5,200 purchase orders Consumer Division 370 computers 230 600 computers Commercial Division 9,700 Total 14,900 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 Cost of goods sold Operating expenses Prepare the divisional income statements for the two divisions. Do not round your interim calculations $8,490,800 4,717,100 1,665,500 $7,074,600 3,572,300 1,768,500 Yozamba Technology Divisional Income Statements For the Year Ended December 31, 20Y7 Commercial Division 230 9,700 600 computers 14,900 purchase orders Total 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 $7,074,600 3,572,300 1,768,500 Revenues Cost of goods sold Operating expenses Prepare the divisional income statements for the two divisions. Do not round your interim calculations. $8,490,800 4,717,100 1,665,500 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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