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Divisional Income Statements with Service Department Charges 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, 2047, are as follows: Tech Support Department $1,252,500 Accounts Payable Department 304,000 Other corporate administrative expenses 669,000 Total corporate expense $2,225,500 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 460 computers 5,300 checks Retail Division 290 9,900 Total 750 computers 15,200 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 $10,280,900 $7,906,700 Cost of goods sold 5,711,600 3,992,500 Operating expenses 2,016,600 1,976,500 Prepare the divisional income statements for the two divisions. POWER SPORTS COMPANY Divisional Income Statements For the Year Ended December 31, 2047 Wholesale Division Retail Division Revenues $ $ Cost of goods sold Gross profit Operating expenses $ Operating income before service department charges Less service department charges: Tech Support department pod op $ Accounts Payable department Operating income $

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