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 $971,500 Purchasing Department 430,000 Other corporate administrative expenses 603,000 Total corporate expense $2,004,500 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 410 computers 6,000 purchase orders Commercial Division 260 11,200 Total 670 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 $8,755,400 $7,613,600 Cost of goods sold 4,864,100 3,844,500 Operating expenses 1,717,400 1,903,200 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Yozamba Technology Divisional Income Statements For the Year Ended December 31, 20Y7 Consumer Division Commercial Division $fill in the blank 2 $fill in the blank 3 fill in the blank 5 fill in the blank 6 $fill in the blank 8 $fill in the blank 9 fill in the blank 11 fill in the blank 12 Income from operations before service department charges $fill in the blank 13 $fill in the blank 14 Service department charges: $fill in the blank 16 $fill in the blank 17 fill in the blank 19 fill in the blank 20 Total service department charges $fill in the blank 21 $fill in the blank 22 $fill in the blank 24 $fill in the blank 25

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 $971,500 Purchasing Department 430,000 Other corporate administrative expenses 603,000 Total corporate expense $2,004,500 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 410 computers 6,000 purchase orders Commercial Division 260 11,200 Total 670 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 $8,755,400 $7,613,600 Cost of goods sold 4,864,100 3,844,500 Operating expenses 1,717,400 1,903,200 Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Yozamba Technology Divisional Income Statements For the Year Ended December 31, 20Y7 Consumer Division Commercial Division $fill in the blank 2 $fill in the blank 3 fill in the blank 5 fill in the blank 6 $fill in the blank 8 $fill in the blank 9 fill in the blank 11 fill in the blank 12 Income from operations before service department charges $fill in the blank 13 $fill in the blank 14 Service department charges: $fill in the blank 16 $fill in the blank 17 fill in the blank 19 fill in the blank 20 Total service department charges $fill in the blank 21 $fill in the blank 22 $fill in the blank 24 $fill in the blank 25

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

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	$971,500
Purchasing Department	430,000
Other corporate administrative expenses	603,000
Total corporate expense	$2,004,500

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	410	computers	6,000	purchase orders
Commercial Division	260		11,200
Total	670	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	$8,755,400		$7,613,600
Cost of goods sold	4,864,100		3,844,500
Operating expenses	1,717,400		1,903,200

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

Yozamba Technology
Divisional Income Statements
For the Year Ended December 31, 20Y7
	Consumer Division	Commercial Division
	$fill in the blank 2	$fill in the blank 3
	fill in the blank 5	fill in the blank 6
	$fill in the blank 8	$fill in the blank 9
	fill in the blank 11	fill in the blank 12
Income from operations before service department charges	$fill in the blank 13	$fill in the blank 14
Service department charges:
	$fill in the blank 16	$fill in the blank 17
	fill in the blank 19	fill in the blank 20
Total service department charges	$fill in the blank 21	$fill in the blank 22
	$fill in the blank 24	$fill in the blank 25

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