41. Why would the company operate a Help Desk department, as opposed to allowing the divisions to handle this function separately on their own?

     ______________________________________________________________________ ______________________________________________________________________ 

42. The amount of technology support costs allocated to the divisions A and B would be:

    Division A $_______________ Division B $_________________

43. The income from operations AFTER service department charges for the two divisions would be:

    Division A $________________ Division B $________________

44. The investment turnover for the Division A would be: (round to 2 decimal places)

    _____________ times

LOHREY Corporation is a decentralized company, divided into 2 divisions, Division A and Division B. The centralized Help Desk of LOHREY budgeted expenses of $300,000 and 10,000 hours of service for 2011. It was estimated that Division A would use 4,500 hours of Technology Support Department service, while Division B budgeted 5,500 hours of Technology Support Department service. 9,800 hours were actually used, 4,900 of which were attributable to Division A. Additional information for the company's two divisions are as follows: Division Division Sales Cost of goods sold Selling expenses Operating income before service department charges $3,200,000 1,610,000 264,000 $3,305,000 1,764,000 235,000 $1,326,000 $1,306,000 Average Invested assets $3,500,000 $2,000,000