Question
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
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, 2017, are as follows: Tech Support Department Purchasing Department $516,000 89,600 Other corporate administrative expenses 560,000 Total corporate expense $1,165,600 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 Consumer Division 375 computers 1,960 purchase orders Commercial Division 225 3,640 Total 600 computers 5,600 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 === $7,430,000 $6,184,000 4,123,000 Operating expenses 1,465,000 3,125,000 1,546,000 Required: Prepare the divisional income statements for the two divisions. Refer to the list of Label and Amount Descriptions for the exact wording of the answer choices for text entries. A colons (:) will fill in where needed. Label Service department charges Amount Descriptions Advertising Department Cost of goods sold Gross profit Income from operations Income from operations before service department charges Operating expenses Purchasing Department Revenues Selling expenses Tech Support Department Total service department charges Prepare the divisional income statements for the two divisions. Refer to the list of Label and Amount Descriptions for the exact wording of the answer choices for text entries. A colons (:) will fill in where needed. 1 2 3 4 5 6 7 (Label) 8 9 10 11 Yozamba Technology Divisional Income Statements For the Year Ended December 31, 20Y7 Consumer Commercial Division Division
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