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 $1,013,200 320,000 573,000 $1,906,200 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 Commercial Division Total 420 computers 260 680 computers 5,600 purchase orders 10,400 16,000 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 $8,676,900 4,820,500 1,702,000 Commercial $6,899,500 3,483,900 1,724,700 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 Consumer Commercial Line Item Description Operating income before support department allocations Support department allocations: Total support department allocations 110000 000000 |10000 100000 11 Previous Next avalement for Grading
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 $1,013,200 320,000 573,000 $1,906,200 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 Commercial Division Total 420 computers 260 680 computers 5,600 purchase orders 10,400 16,000 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 $8,676,900 4,820,500 1,702,000 Commercial $6,899,500 3,483,900 1,724,700 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 Consumer Commercial Line Item Description Operating income before support department allocations Support department allocations: Total support department allocations 110000 000000 |10000 100000 11 Previous Next avalement for Grading
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text: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
$1,013,200
320,000
573,000
$1,906,200
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
Commercial Division
Total
420 computers
260
680 computers
5,600 purchase orders
10,400
16,000 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
$8,676,900
4,820,500
1,702,000
Commercial
$6,899,500
3,483,900
1,724,700
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
Consumer Commercial
Line Item Description
Operating income before support department allocations
Support department allocations:
Total support department allocations
110000 000000
|10000 100000
11
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