Reference no: EM132344678

Question

Tech Support Department $666,900

Purchasing Department 348,000

Other corporate administrative

Expenses 436,000

Total corporate expense $1,450,900

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 350computers 6,100 purchase orders

Commercial Division 220 11,300

Total 570computers 17,400 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 $6,250,700 $5,602,100

Cost of goods sold 3,472,600 2,828,800

Operating expenses 1,226,100 1,400,400

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