eBook Show Me How 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, 2017, are as follows: Tech Services Department Purchasing Department Other corporate administrative expenses Total expense $1,132,400 308,000 619,000 $2,059,400 The other corporate administrative expenses include officers' salanes 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 < Consumer Division Commercial Division Total 470 computers 290 760 computers Purchasing 5,400 purchase orders 10,000 15,400 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: Revenues Cost of goods sold Operating expenses Consumer $9,505,800 5,281,000 1,864,600 Commercial $7,325,100 3,698,800 1,831,100 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, 2017 Previous Next
eBook Show Me How 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, 2017, are as follows: Tech Services Department Purchasing Department Other corporate administrative expenses Total expense $1,132,400 308,000 619,000 $2,059,400 The other corporate administrative expenses include officers' salanes 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 < Consumer Division Commercial Division Total 470 computers 290 760 computers Purchasing 5,400 purchase orders 10,000 15,400 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: Revenues Cost of goods sold Operating expenses Consumer $9,505,800 5,281,000 1,864,600 Commercial $7,325,100 3,698,800 1,831,100 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, 2017 Previous Next
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, 2017,
are as follows:
Tech Services Department
Purchasing Department
Other corporate administrative expenses
Total expense
$1,132,400
308,000
619,000
$2,059,400
The other corporate administrative expenses include officers' salanes 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
<
Consumer Division
Commercial Division
Total
470 computers
290
760 computers
Purchasing
5,400 purchase orders
10,000
15,400 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:
Revenues
Cost of goods sold
Operating expenses
Consumer
$9,505,800
5,281,000
1,864,600
Commercial
$7,325,100
3,698,800
1,831,100
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, 2017
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