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10 July, 08:31

Divisional Income Statements The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8:

Cost of goods sold: Support department allocations:

Commercial Division $447,070 Commercial Division $60,960

Residential Division 227,600 Residential Division 39,420

Administrative expenses: Sales:

Commercial Division $81,290 Commercial Division $677,380

Residential Division 406,430 Residential Division 81,290

Prepare divisional income statements for Ruiz Industries Inc.

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  1. 10 July, 08:36
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    Commercial division has net income of $88,060

    Residential division has net income of $58,120

    Company wide net income is $146,180

    Explanation:

    Ruiz Industries divisional income statement as at 30 November 20Y8

    commercial division residential division

    Sales $677,380 $406,430

    costs of goods sold ($447,070) ($227,600)

    Gross profit $230,310 $178,830

    Administrative expenses ($81,290) ($81,290)

    operating income $149,020 $97,540

    Allocated costs ($60,960) ($39,420)

    Division net income $88,060 $58,120

    Even though the allocated costs were not incurred directly by the divisions, but they are still part of the entire business expenses that must be recovered
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