Profit Center Responsibility Reporting for a Service Company Thomas Railroad Company organizes its three divisions, the

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Profit Center Responsibility Reporting For A Service Company Thomas Railroad Company Organizes Its Three Divisions The 1 (207.9 KiB) Viewed 25 times

Profit Center Responsibility Reporting for a Service Company Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues-N Region N $1,283,100 Revenues-S Region 1,524,500 Revenues-W Region 2,739,200 Operating Expenses-N Region 813,100 Operating Expenses-S Region 907,300 Operating Expenses-W Region 1,656,500 Corporate Expenses-Dispatching 691,300 Corporate Expenses-Equipment Management 260,000 Corporate Expenses-Treasurer's 195,100 General Corporate Officers' Salaries 430,900 The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurer's Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the railroad cars inventories. It makes sure the right freight cars are at the right place at the right time. The Treasurer's Department conducts a variety of services for the company as a whole. The following additional information has been gathered: South West North 5,600 6,700 10,000 Number of scheduled trains Number of railroad cars in inventory Required: 1,000 1,600 1,400 1. Prepare quarterly income statements showing operating income for the three regions. Use three column headings: North, South, and West. Do not round your interim calculations. Thomas Railroad Company Divisional Income Statements For the Quarter Ended December 31 South West Revenues Operating expenses North Operating income before support department allocations Support department allocations: Dispatching 000 0000 100 0000 Equipment Management Total support department allocations Operating income $ $ 2. What is the profit margin of each region? Round to one decimal place. Profit Margin Region North Region South Region % Accounting numeric field West Region % Check My Work 3 more Check My Work uses remaining Next