Reference no: EM132687432
Problem - Divisional income statement - The revenues and direct operating expenses for the two divisions of the UniCast Cable Company for the year ended December 31, 2012, are as follows:
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|
Eastern Division
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Western Division
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|
Revenues
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$4,100,000
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$3,500,000
|
|
Operating expenses
|
2,450,000
|
2,200,000
|
There are three central service departments: billing, payroll, and service and repairs. The expenses associated with these central service departments for December 31, 2012, are as follows:
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Billing
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$310,000
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|
Payroll
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265,000
|
|
Service and repairs
|
684,000
|
|
Total
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$1,259,000
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The central service department expenses are allocated to the two divisions based on relevant activity bases. The billing, payroll, and service and repairs departments are allocated to the divisions on the basis of bills, payroll checks, and repair requests, respectively.
The consumption of activity by the two divisions from the three service departments for 2012 is as follows:
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Eastern Division
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Western Division
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Total
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|
Billing
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18,500
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21,500
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40000 bills
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|
Payroll
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1,530
|
1,870
|
3,400 payroll chks.
|
|
Service and repairs
|
408
|
442
|
850 serv. requests
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Required - Prepare a divisional income statement for UniCast Cable Company for the year ended December 31, 2012.