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Divisional Income Statements with Service Department Charges Grael 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 Purchasing Department Other corporate administrative expenses Total corporate expense 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: Consumer Division Commercial Division Total Tech Support Purchasing 350 computers 5,900 purchase orders 220 11,000 570 computers 16,900 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: Revenues Cost of goods sold Gross profit Consumer $6,350,600 3,528,100 1,245,700 ✓ Revenues Cost of goods sold 2,626,200 Operating expenses 1,300,100 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. GRAEL TECHNOLOGY Divisional Income Statements For the Year Ended December 31, 2017 - V V t $735,300 253,500 425,000 $1,413,800 Operating expenses Income from operations before service department charges. Less service department charges: Tech Support department Purchasing department Income from operations ✓ V Commercial $5,200,900 ✓ Consumer Division 00000 001 QO lau Commercial Division 88

Divisional Income Statements with Service Department Charges Grael 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 Purchasing Department Other corporate administrative expenses Total corporate expense 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: Consumer Division Commercial Division Total Tech Support Purchasing 350 computers 5,900 purchase orders 220 11,000 570 computers 16,900 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: Revenues Cost of goods sold Gross profit Consumer $6,350,600 3,528,100 1,245,700 ✓ Revenues Cost of goods sold 2,626,200 Operating expenses 1,300,100 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. GRAEL TECHNOLOGY Divisional Income Statements For the Year Ended December 31, 2017 - V V t $735,300 253,500 425,000 $1,413,800 Operating expenses Income from operations before service department charges. Less service department charges: Tech Support department Purchasing department Income from operations ✓ V Commercial $5,200,900 ✓ Consumer Division 00000 001 QO lau Commercial Division 88

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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< Divisional Income Statements with Service Department Charges Grael 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 $735,300 253,500 Purchasing Department Other corporate administrative expenses 425,000 Total corporate expense $1,413,800 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 350 computers 5,900 purchase orders Consumer Division Commercial Division 220 11,000 Total 570 computers 16,900 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: Commercial Revenues $5,200,900 Cost of goods sold 2,626,200 Operating expenses 1,300,100 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. GRAEL TECHNOLOGY Revenues Cost of goods sold Gross profit Consumer $6,350,600. 3,528,100 1,245,700 Divisional Income Statements For the Year Ended December 31, 20Y7 Operating expenses Income from operations before service department charges Less service department charges: Tech Support department Purchasing department Income from operations Consumer Division 8.8 Commercial Division
Transcribed Image Text:< Divisional Income Statements with Service Department Charges Grael 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 $735,300 253,500 Purchasing Department Other corporate administrative expenses 425,000 Total corporate expense $1,413,800 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 350 computers 5,900 purchase orders Consumer Division Commercial Division 220 11,000 Total 570 computers 16,900 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: Commercial Revenues $5,200,900 Cost of goods sold 2,626,200 Operating expenses 1,300,100 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. GRAEL TECHNOLOGY Revenues Cost of goods sold Gross profit Consumer $6,350,600. 3,528,100 1,245,700 Divisional Income Statements For the Year Ended December 31, 20Y7 Operating expenses Income from operations before service department charges Less service department charges: Tech Support department Purchasing department Income from operations Consumer Division 8.8 Commercial Division
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