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Consumer Commercial Revenues $7,430,000   $6,184,000   Cost of goods sold 4,123,000   3,125,000   Operating expenses 1,465,000   1,546,000     Prepare the divisional income statements for the two divisions. Round your interim calculations to three decimal places, if required. Yozamba Technology Divisional Income Statements For the Year Ended December 31, 20Y7     Consumer Division   Commercial Division     $   $               $   $           Income from operations before service department charges   $   $ Service department charges:             $   $           Total service department charges   $   $     $   $

Question

Divisional Income Statements with Service Department Charges

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, 20Y7, are as follows:

Tech Support Department $516,000
Purchasing Department 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 $7,430,000   $6,184,000  
Cost of goods sold 4,123,000   3,125,000  
Operating expenses 1,465,000   1,546,000  

 

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

Yozamba Technology
Divisional Income Statements
For the Year Ended December 31, 20Y7
    Consumer Division   Commercial Division
    $   $
         
    $   $
         
Income from operations before service department charges   $   $
Service department charges:        
    $   $
         
Total service department charges   $   $
    $   $
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