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Commercial Division YOZAMBA TECHNOLOGY Divisional Income Statements For the Year Ended December 31, 2016 Consumer Division Revenues Cost of goods sold Gross profit Operating expenses Income from operations before service department charges Less service department charges: Tech Support Dept Purchasing Dept. In Income from operations OBJ. 3 EX 23-7 Divisional income statements with service department charges 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, 2016, are as follows: Commercial income from operations, $1,261,260 SHOW ME HOW Tech Support Department $ 516,000 Purchasing Department 89,600 Other corporate administrative expenses 560,000 Total corporate expense $1,165,600 The other corporate administrative expenses include officers' salaries and other ex- penses 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 Consumer Division 375 computers 1,960 purchase orders Commercial Division 225 3,640 Total 600 computers 5,600 purchase orders The service department charges of the Tech Support Department and the Purchasing Department are considered controllable by the divisions. Corporate administrative ex- penses are not considered controllable by the divisions. The revenues, cost of goods sold, and operating expenses for the two divisions are as follows: Consumer Commercial $7.430,000 Revenues $6,184,000 4,123,000 Cost of goods sold 3,125,000 1.465,000 1,546,000 Operating expenses Prepare the divisional income statements for the two divisions

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