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 $800,100 Purchasing Department 258,000 Other corporate administrative expenses 455,000 Total corporate expense $1,513,100 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 390 computers 6,000 purchase orders Commercial Division 240 11,200 Total 630 computers 17,200 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 $6,883,400 $5,479,300 Cost of goods sold 3,824,100 2,766,800 Operating expenses 1,350,200 1,369,700 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Consumer Division Commercial Division $Revenues $Revenues Cost of goods sold Cost of goods sold $Gross profit $Gross profit Operating expenses Operating expenses Income from operations before service department charges $fill in the blank 13 $fill in the blank 14 Service department charges: blank $Tech support department blank $Tech support department blank Purchasing department blank Purchasing department Total service department charges blank $fill in the blank 21 blank $fill in the blank 22 $Income from operations $Income from operations

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 $800,100 Purchasing Department 258,000 Other corporate administrative expenses 455,000 Total corporate expense $1,513,100 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 390 computers 6,000 purchase orders Commercial Division 240 11,200 Total 630 computers 17,200 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 $6,883,400 $5,479,300 Cost of goods sold 3,824,100 2,766,800 Operating expenses 1,350,200 1,369,700 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Consumer Division Commercial Division $Revenues $Revenues Cost of goods sold Cost of goods sold $Gross profit $Gross profit Operating expenses Operating expenses Income from operations before service department charges $fill in the blank 13 $fill in the blank 14 Service department charges: blank $Tech support department blank $Tech support department blank Purchasing department blank Purchasing department Total service department charges blank $fill in the blank 21 blank $fill in the blank 22 $Income from operations $Income from operations

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 7E: Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments,...

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Tech Support Department	$800,100
Purchasing Department	258,000
Other corporate administrative expenses	455,000
Total corporate expense	$1,513,100

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	390	computers	6,000	purchase orders
Commercial Division	240		11,200
Total	630	computers	17,200	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	$6,883,400		$5,479,300
Cost of goods sold	3,824,100		2,766,800
Operating expenses	1,350,200		1,369,700

Prepare the divisional income statements for the two divisions. Do not round your interim calculations.

	Consumer Division		Commercial Division
		$Revenues		$Revenues
		Cost of goods sold		Cost of goods sold
		$Gross profit		$Gross profit
		Operating expenses		Operating expenses
Income from operations before service department charges		$fill in the blank 13		$fill in the blank 14
Service department charges:
	blank	$Tech support department	blank	$Tech support department
	blank	Purchasing department	blank	Purchasing department
Total service department charges	blank	$fill in the blank 21	blank	$fill in the blank 22
		$Income from operations		$Income from operations

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