eBook Show Me How Calculator Income from Operations for Profit Center The centra
ID: 2555437 • Letter: E
Question
eBook Show Me How Calculator Income from Operations for Profit Center The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and Division has used 1,250 hours of computer technology service. Additional data for the two divisions is following below Retail Division Commercial Division Sales Cost of goods sold 1,300,000 Selling expenses Determine the divisional income from operations for the Retail Division and the Commercial Division. Do not round interim calcufations 2,150,000 $1,200,000 800,000 75,000 150,000 Hardy Company Divisional Income from Operations Retail Division Commercial Division -, 3/28/2018 DOLLExplanation / Answer
Computer Technology Department Expenses
$ 320,000
Service provided
4000
hour
Computer Technology Expense per service hour
= 320000 / 4000
$ 80
per hour
Allocation of expense
Retail Division
Commercial Division
Service used from Computer Technology Department
2750
1250
hours
Expense per hour
$ 80
$ 80
Computer Technology Expense
= 2750 *80
= 1250 *80
$ 220,000
$ 100,000
Hardy Company
Divisional Income from Operations
Retail Division
commercial Division
Sales
$ 2,150,000
$ 1,200,000
Cost of goods Sold
$ 1,300,000
$ 800,000
Selling Expenses
$ 150,000
$ 175,000
Computer technology Expenses
$ 220,000
$ 100,000
Total Costs
$ 1,670,000
$ 1,075,000
Net Profit
$ 480,000
$ 125,000
Computer Technology Department Expenses
$ 320,000
Service provided
4000
hour
Computer Technology Expense per service hour
= 320000 / 4000
$ 80
per hour
Allocation of expense
Retail Division
Commercial Division
Service used from Computer Technology Department
2750
1250
hours
Expense per hour
$ 80
$ 80
Computer Technology Expense
= 2750 *80
= 1250 *80
$ 220,000
$ 100,000
Hardy Company
Divisional Income from Operations
Retail Division
commercial Division
Sales
$ 2,150,000
$ 1,200,000
Cost of goods Sold
$ 1,300,000
$ 800,000
Selling Expenses
$ 150,000
$ 175,000
Computer technology Expenses
$ 220,000
$ 100,000
Total Costs
$ 1,670,000
$ 1,075,000
Net Profit
$ 480,000
$ 125,000
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