ivisional 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	$1,170,000
Purchasing Department	450,000
Other corporate administrative expenses	800,000
Total expense	$2,420,000

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	1,100	computers	4,000	purchase orders
Commercial Division	700		8,000
Total	1,800	computers	12,000	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	$15,500,000		$33,250,000
Cost of goods sold	10,000,000		15,800,000
Operating expenses	3,000,000		1,750,000

Prepare the divisional income statements for the two divisions. Round your interim calculations to three decimal places, if required.

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