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ch 24 5 Corrections to Service Department Allocations for a Service Company Wild Sun Airlines Inc. has two divisions organized as profit centers, the Passenger
ch 24 5
Corrections to Service Department Allocations 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 Cargo Division Revenues $2,165,000 $2,165,000 1,752,680 1,955,760 $412,320 $209,240 Operating expenses Income from operations before service department allocations Less service department cost allocations: Training Flight scheduling $88,000 $88,000 80,580 80,580 107,400 Reservations 107,400 275,980 275,980 Income from operations $136,340 $(66,740) The service department allocations rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department allocations to each division were also the same. The following additional information is available: Passenger Cargo Division Division Total 230 90 320 Number of personnel trained Number of flights Number of reservations requested 330 460 790 17,900 0 17,900 b. Correct the divisional income statements, using the cost drivers provided in revising the service department cost allocations. If an amount box does not require an entry, leave it blank. Do not round your interim calculations. Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 2019 Passenger Division Cargo Division Revenues Operating expenses Income from operations before service department allocations Less service department cost allocations: Training Flight scheduling qol Reservations Income from operations $Step by Step Solution
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