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Corrections to Service Department Charges Panda Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional

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Corrections to Service Department Charges Panda Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared: PANDA ATRLINES INC Divisional Income Statements For the Year Ended April 30, 2049 Passenger Division Cargo Division Revenues 52.252,000 $2.282.000 Operating expenses (1,847.300) (2,052,500) Operating Income before service department charges $434,700 3229.500 Less service department chargest Training $113,400 5113.400 79,200 79,200 Flight scheduling 101 400 204,000) 101.400 (294.000 Reservations $140.700 $(54500 Operating income tloss) The service department change rate for the service department costs was based on wees. Siece the revnost of the two otheme the service department charges to each division were also the sacre ning The service department charge rate for the service department costs was based on revenues. Since the revenues of the two divisions were the the service department charges to each division were also the same. The following additional information is available: Passenger Cargo Total Division Division 300 120 420 Number of personnel trained Number of flights Number of reservations requested 300 420 720 16.900 0 16,900 a. Does the operating income for the two divisions accurately measure performance? b. Using service charge rates for service department charges, correct the divisional income statements. I an amount box does not require an entry, leave it blank or enter"0", PANDA AIRLINES INC. Divisional Income Statements For the Year Ended April 30, 2019 Passenger Division Cargo Division Pento opereunty come for the two divisions accurately measure performance? b. Using service charge rates for service department charges, correct the divisional income statements. If an amount box does not requ entry, leave it blank or enter "o". PANDA AIRLINES INC. Divisional Income Statements For the Year Ended April 30, 2019 Passenger Division Cargo Division Operating income before service department charges Less service department charges

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