ivisional Income Statements with Service Department Charges Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department $824,100 Accounts Payable Department 314,000 Other corporate administrative expenses 489,000 Total corporate expense $1,627,100
Divisional Income Statements with Service Department Charges
Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 20Y7, are as follows:
| Tech Support Department | $824,100 |
| Accounts Payable Department | 314,000 |
| Other corporate administrative expenses | 489,000 |
| Total corporate expense | $1,627,100 |
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 Accounts Payable Department charges divisions for services, based on the number of checks issued. The usage of service by the two divisions is as follows:
| Tech Support | Accounts Payable | |||
| Wholesale Division | 410 | computers | 5,500 | checks |
| Retail Division | 260 | 10,200 | ||
| Total | 670 | computers | 15,700 | checks |
The service department charges of the Tech Support Department and the Accounts Payable 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:
| Wholesale | Retail | |||
| Revenues | $7,224,500 | $6,070,100 | ||
| Cost of goods sold | 4,013,600 | 3,065,100 | ||
| Operating expenses | 1,417,100 | 1,517,400 |
Prepare the divisional income statements for the two divisions.
POWER SPORTS COMPANYDivisional Income StatementsFor the Year Ended December 31, 20Y7
| Wholesale Division | Retail Division | |||
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$Revenues | $Revenues | ||
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Cost of goods sold | Cost of goods sold | ||
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$Gross profit | $Gross profit | ||
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Operating expenses | Operating expenses | ||
| Operating income before service department charges | $fill in the blank 13 | $fill in the blank 14 | ||
| Less service department charges: | ||||
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$Tech Support department | $Tech Support department | ||
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Accounts Payable department | Accounts Payable department | Accounts Payable department | Accounts Payable department |
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$Operating income | $Operating income |
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