Answer and Explanation:
The Preparation of divisional income statements is following below:-
Ruiz Industries Inc.
Divisional Income Statements
For the Year Ended November 30, 2018
Commercial Division Residential Division
Sales a $479,140 $292,280
Cost of goods sold b $316,230 $163,680
Gross profit c = (a - b) $162,910 $128,600
Administrative expenses d $57,500 $58,460
Operating income $105,410 $70,140
(e = c - d)
Support department
allocations f $43,120 $28,350
Segment Income $62,290 $41,790
(g = e - f)
So, to reach at segment income we subtract the Support department allocations from operating income.
