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Divisional Income Statements with Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $1,124,800 Purchasing Department 314,000 Other corporate administrative expenses 619,000 Total expense $2,057,800 The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: Tech Services Purchasing Consumer Division 470 computers 5,500 purchase orders Commercial Division 290 10,200 Total 760 computers 15,700 purchase orders The support department allocations of the Tech Services 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 $9,474,300 $7,337,900 Cost of goods sold 5,263,500 3,705,300 Operating expenses 1,858,400 1,834,300 Prepare the divisional income statements for the two divisions. Do not round your interim calculations.

Divisional Income Statements with Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $1,124,800 Purchasing Department 314,000 Other corporate administrative expenses 619,000 Total expense $2,057,800 The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: Tech Services Purchasing Consumer Division 470 computers 5,500 purchase orders Commercial Division 290 10,200 Total 760 computers 15,700 purchase orders The support department allocations of the Tech Services 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 $9,474,300 $7,337,900 Cost of goods sold 5,263,500 3,705,300 Operating expenses 1,858,400 1,834,300 Prepare the divisional income statements for the two divisions. Do not round your interim calculations.

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 Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $1,124,800 Purchasing Department 314,000 Other corporate administrative expenses 619,000 Total expense $2,057,800 The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: FEE Tech Services Purchasing Consumer Division 470 computers 5,500 purchase orders Commercial Division 290 10,200 Total 760 computers 15,700 purchase orders The support department allocations of the Tech Services 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 $9,474,300 $7,337,900 Cost of goods sold 5,263,500 3,705,300 Operating expenses 1,858,400 1,834,300 Prepare the divisional income statements for the two divisions. Do not round your interim calculations.
Transcribed Image Text:Divisional Income Statements with Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $1,124,800 Purchasing Department 314,000 Other corporate administrative expenses 619,000 Total expense $2,057,800 The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: FEE Tech Services Purchasing Consumer Division 470 computers 5,500 purchase orders Commercial Division 290 10,200 Total 760 computers 15,700 purchase orders The support department allocations of the Tech Services 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 $9,474,300 $7,337,900 Cost of goods sold 5,263,500 3,705,300 Operating expenses 1,858,400 1,834,300 Prepare the divisional income statements for the two divisions. Do not round your interim calculations.
Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Horton Technology Divisional Income Statements For the Year Ended December 31, 20Y7 Consumer Division Commercial Division Revenues Cost of goods sold Gross profit Operating expenses Operating income before support department allocations Support department allocations: Tech service department Purchasing department Total support department allocations Operating income v
Transcribed Image Text:Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Horton Technology Divisional Income Statements For the Year Ended December 31, 20Y7 Consumer Division Commercial Division Revenues Cost of goods sold Gross profit Operating expenses Operating income before support department allocations Support department allocations: Tech service department Purchasing department Total support department allocations Operating income v
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