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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

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:

Line Item Description Amount
Tech Services Department $986,100
Purchasing Department 415,000
Other corporate administrative expenses 602,000
Total expense $2,003,100

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:

Line Item Description Tech Services Purchasing
Consumer Division 350 computers 5,800 purchase orders
Commercial Division 220 10,800
Total 570 computers 16,600 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:

Line Item Description Consumer Commercial
Revenues $8,826,300 $7,539,400
Cost of goods sold 4,903,500 3,807,000
Operating expenses 1,731,300 1,884,700

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

Line Item Description Consumer Division Commercial Division
Gross profitCashOperating expensesOperating incomeRevenues $- Select - $- Select -
CashCost of goods soldGross profitOperating incomeTech service department - Select - - Select -
CashGross profitLoss from operationsOperating expensesRevenues $- Select - $- Select -
CashLoss from operationsOperating expensesOperating incomePurchasing department - Select - - Select -
Operating income before support department allocations $Operating income before support department allocations $Operating income before support department allocations
Support department allocations:
CashCost of goods soldOperating expensesOperating incomeTech service department $- Select - $- Select -
CashGross profitOperating expensesOperating incomePurchasing department - Select - - Select -
Total support department allocations $Total support department allocations $Total support department allocations
Gross profitOperating incomeOperating income before service department chargesLoss from operations $- Select - $- Select -

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