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Determining Divisional Income For Company A and B

Using the data from the Koko Company, determine the divisional income from operations for the A and B regions. I need to allocate service department expenses proportional to the sales of each region

A Region

B Region

Sales
$600,000

$900,000

Cost of goods sold
200,000

350,000

Selling expenses
150,000

275,000

Service department expenses
Purchasing
$80,000

Payroll accounting
40,000

Solution Preview

Total sales for both regions = 600,000 + 900,000 = 1,500,000

Purchasing expense for each region is as follows:
Region A = (600,000 / ...

Solution Summary

The solution gives detailed steps on determining the divisional income from operations for the A and B regions.

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