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Cargo Corrections to Service Department Charges for a Service Company Wild Sun Airlines Inc. has two divisions organized as profit centers, the Passenger Division and

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Cargo Corrections to Service Department Charges for a Service Company Wild Sun Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared: Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 2019 Passenger Division Division Revenues $2,300,000 $2,300,000 Operating expenses 1,861,900 2,076,950 Income from operations before $438,100 service department charges $223,050 Service department charges: Training $101,400 $101,400 Flight scheduling 82,875 82.875 Reservations 109,200 109,200 Total service department charges $293,475 $293,475 Income from operations $144,625 $(70,425) The service department charge rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department charges to each division were also the same. The following additional information is available: The following additional Information is available: Passenger Division Cargo Total Division Number of personnel trained 280 110 390 360 490 850 Number of flights Number of reservations requested 16,800 0 16,800 a. Does the income from operations for the two divisions accurately measure performance? Explain. The reported income from operations accurately measure performance because the service department charges are based on associated with the profit center manager's use of the service department services. Revenues b. Correct the divisional income statements, using the activity bases provided in revising the service department charges. If an amount box does not require an entry, leave it blank, or enter "0". Do not round your interim calculations. Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 2019 Passenger Division Cargo Division Income from operations before service department charges Service department charges: Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 2049 Passenger Division Cargo Division Income from operations before service department charges Service department charges: Dini Total service department charges

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