Divisional Income Statement
|
Consumer Division
|
Commercial division
|
Revenues
|
|
7,470,000
|
|
6,186,000
|
Less: cost of goods sold
|
|
4,109,000
|
|
3,119,500
|
Gross profit
|
|
3,361,000
|
|
3,066,500
|
Operating expenses
|
|
1,466,000
|
|
1,546,000
|
Income from operations before service department
charges
|
|
1,895,000
|
|
1,520,500
|
Less: Service department charges
|
|
|
|
|
Tech support department
|
332,000
|
|
141,100
|
|
Purchasing department
|
27,440
|
359,440
|
48,160
|
189,260
|
Income from operations
|
|
1,535,560
|
|
1,331,240
|
Working notes:
- Tech support department charges
Per computer cost = 473100/570 = $ 830
per computer
Allocation as:
Consumer division = 830*400 =
332,000
Commercial division = 830 *170 =
141,100
- Purchasing department charges
Per order cost = 75600/5400 = $ 14 per
order
Allocation as:
Consumer division = 14*1960 =
27,440
Commercial division = 14*3440 =
48,160
kindly upvote