Question

Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 2017, are as follows: $1,240,200 Tech Support Department Purchasing Department Other corporate administrative expenses 447,000 725,000 Total corporate expense $2,412,200 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 5,200 purchase orders Consumer Division 480 computers Commercial Division 300 9,700 Total 780 computers 14,900 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: Commercial Revenues Consumer $10,810,100 6,005,600 2,120,400 Cost of goods sold $8,899,700 4,493,900 2,224,700 Operating expenses

Answer 1

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Answer Yozamba Technology Divisional Income Statement For the Year Ended December 31, 2017 Consumer Division Commercial Division 8 Revenue 10810100 8899700 9 Cost of Goods Sold 6005600 4493900 10 Gross Margin 4804500 4405800 11 Operating expenses 2120400 2224700 Income from operations before service 12 department charges 2684100 2181100 13 Service department charges 14 Tech Support Department 763200 477000 15 ((480/780) *1240200) ((300/780) *1240200) 16 Purchasing department 156000 291000 17 (5200/14900) *447000) ((9700/14900) *447000) 18 Divisional Segment Margin 1764900 1413100 19 20 Note 21 The unbold amount are just part of calculations and are for understanding purpose only. 23 Thank You