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 $2,392,000 $2,392,000 Operating expenses 1,936,460 2,126,720 Income from operations before service department allocations $455,540 $265,280 Less service department cost allocations: Training $115,200 $115,200 Flight scheduling 99,360 99,360 Reservations 102,000 316,560 102,000 316,560 Income from operations $138,980 $(51,280) 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 Division Cargo Division Total Number of personnel trained 340 140 480 Number of flights 390 530 920 Number of reservations requested 17,000 0 17,000 a. Does the income from operations for the two divisions accurately measure performance? Explain. The reported income from operations based on Revenues accurately measure performance because the service department allocations are associated with the profit center manager's use of the service department services. 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 Income from operations before service department allocations Less service department cost allocations