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Using the data below for the Ace Guitar Company: A Region B Region Sales $767,000 $413,000...

Using the data below for the Ace Guitar Company:

A Region B Region
Sales $767,000 $413,000
Cost of goods sold 291,500 156,900
Selling expenses 184,100 99,100
Service department expenses
Purchasing $198,200
Payroll accounting 132,200

Allocate service department expenses proportional to the sales of each region. Determine the divisional income from operations for the A and B regions. For interim calculations, round percentages to one decimal place.

A Region $
B Region $
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Answer #1
A B
Region region
Sales 767,000 413,000
cost of goods sold 291,500 156900
selling expense 184100 99100
service deptt expense 214760 115640
divisional income 76,640 41,360 answer
Sales ratio = 1,180,000
product A    = 767000/1180000
65.00%
product B    = 413000/1180000
35.00%
total Service department expense in the ratio of 65%:35%
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