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Corrections to Sen ice Department Allocations for a Service Company Wid Sun Arihes Inc. has two civisions organized as profit centers, the Passenger Division and
Corrections to Sen ice Department Allocations for a Service Company Wid Sun Arihes Inc. has two civisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were 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 avalible: The following additional information is available: 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 allocations are based on Revenues associated with the profit center manager's use of the service department services
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