Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department $1,146,600 Accounts Payable Department 522,000 Other corporate administrative expenses 717,000 Total corporate expense $2,385,600 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. The usage of service by the two divisions is as follows: Tech Support Accounts Payable Wholesale Division 480 computers 6,100 checks Retail Division 300 11,300 Total 780 computers 17,400 checks 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: Wholesale Retail Revenues $10,450,100 $9,038,900 Cost of goods sold 5,805,600 4,564,200 Operating expenses 2,049,800 2,259,500 Prepare the divisional income statements for the two divisions.
Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 20Y7, are as follows:
| Tech Support Department | $1,146,600 |
| Accounts Payable Department | 522,000 |
| Other corporate administrative expenses | 717,000 |
| Total corporate expense | $2,385,600 |
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. The usage of service by the two divisions is as follows:
| Tech Support | Accounts Payable | |||
| Wholesale Division | 480 | computers | 6,100 | checks |
| Retail Division | 300 | 11,300 | ||
| Total | 780 | computers | 17,400 | checks |
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:
| Wholesale | Retail | |||
| Revenues | $10,450,100 | $9,038,900 | ||
| Cost of goods sold | 5,805,600 | 4,564,200 | ||
| Operating expenses | 2,049,800 | 2,259,500 |
Prepare the divisional income statements for the two divisions.
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