Income from Operations for Profit Center The centralized computer technology dep
ID: 2558330 • Letter: I
Question
Income from Operations for Profit Center
The centralized computer technology department of Lee Company has expenses of $264,000. The department has provided a total of 2,500 hours of service for the period. The Retail Division has used 1,125 hours of computer technology service during the period, and the Commercial Division has used 1,375 hours of computer technology service. Additional data for the two divisions is following below:
Determine the divisional income from operations for the Retail Division and the Commercial Division. Do not round interim calculations.
Retail Division Commercial Division Sales $945,000 $966,000 Cost of goods sold 504,000 559,300 Selling expenses 156,800 175,000Explanation / Answer
Retail Division Commercial Division Sales 945000 966000 Cost of goods sold 504000 559300 Gross Profit 441000 406700 Selling expenses 156800 175000 Income from operations before service department charges 284200 231700 Service department charges 118800 145200 Income from operations 165400 86500