Divisional Income Statements with Support Department Allocations

Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows:

Tech Services Department	$1,299,400
Purchasing Department	338,000
Other corporate administrative expenses	704,000
Total expense	$2,341,400

The other corporate administrative expenses include officers salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows:

	Tech Services		Purchasing
Consumer Division	450	computers	5,900	purchase orders
Commercial Division	280		11,000
Total	730	computers	16,900	purchase orders

The support department allocations of the Tech Services 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	$10,807,900		$8,325,200
Cost of goods sold	6,004,400		4,203,800
Operating expenses	2,120,000		2,081,100

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

Horton Technology Divisional Income Statements For the Year Ended December 31, 20Y7

		Consumer Division		Commercial Division
Gross profit Cash Operating income Operating expenses Revenues?		$		$
Cash Cost of goods sold Gross profit Operating income Tech service department?
CashGross profit Loss from operations Operating expenses Revenues		$		$
Cash Operating income Loss from operations Operating expenses Purchasing department
Operating income before support department allocations		$fill in the blank 13		$fill in the blank 14
Support department allocations:
Cash Cost of goods sold Operating income Operating expenses Tech service department	blank	$	blank	$
CashGross profit. Operating income Operating expenses Purchasing department	blank		blank
Total support department allocations	blank	$fill in the blank 21	blank	$fill in the blank 22
Gross profit Operating income Operating income before service department charges Loss from operations		$		$