Income for Profit Center The centralized computer technology department of Crutchfield Company has costs of $982,500. The department has provided a total of 13,100 hours of service for the period. The Retail Division has used 5,900 hours of computer technology service during the period, and the Commercial Division has used 7,200 hours of computer technology service. Additional data for the two divisions is following below: Retail Commercial Division Division Sales $6,320,000 $4,950,000 Cost of goods sold 3,190,000 2,220,000 Selling expenses 502,000 489,000 Determine the divisional income from operations for the Retail Division and the Commercial Division.

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.