- Chapter 10 Homework Question 4 1 (60.64 KiB) Viewed 44 times
Chapter 10 Homework Question 4
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Chapter 10 Homework Question 4
Chapter 10 Homework Question 4
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, 2047, are as follows: Tech Services Department $1,170,000 Purchasing Department 415,000 Other corporate administrative expenses 682,000 Total expense $2,267,000 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 400 computers 5,800 purchase orders 10,800 Commercial Division 250 Total 650 computers 16,600 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: Consumer Commercial Revenues $10,172,700 $8,343,600 5,651,500 4,213,100 Cost of goods sold Operating expenses 1,995,400 2,085,700 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 Division Commercial Division Revenues Cost of goods sold Gross profit Operating expenses Operating income before support department allocations Support department allocations: Tech service department 000000000 DJOI QOL Purchasing department ✓ Total support department allocations Operating income ✓
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, 2047, are as follows: Tech Services Department $1,170,000 Purchasing Department 415,000 Other corporate administrative expenses 682,000 Total expense $2,267,000 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 400 computers 5,800 purchase orders 10,800 Commercial Division 250 Total 650 computers 16,600 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: Consumer Commercial Revenues $10,172,700 $8,343,600 5,651,500 4,213,100 Cost of goods sold Operating expenses 1,995,400 2,085,700 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 Division Commercial Division Revenues Cost of goods sold Gross profit Operating expenses Operating income before support department allocations Support department allocations: Tech service department 000000000 DJOI QOL Purchasing department ✓ Total support department allocations Operating income ✓