Question

Van Emburgh Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 2014, are as follows: Tech Support Department $ 676,000 Accounts Payable Department 256,000 Other corporate administrative expenses 402,000 Total corporate expense $ 1,334,000
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 Accounts Payable Department charges divisions for services, based on the number of checks issued for each department. The usage of service by the two divisions is as follows:


The service department charges of the Tech Support Department and the Accounts Payable 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:


Prepare the divisional income statements for the twodivisions.


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  • CreatedJune 27, 2014
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