Corrections to Support Department Allocations for a Service Company Rocky Mountain Nrlines Inc. has two divisions organized as profit centers, the Passenger Division and the Carpe Division. The following divisional income statements were prepared Rocky Mountain Airlines Inc. Divisional Income Statements For the Year Ended December 31, 2019 Passenger Cargo Division Division Revenues 54,200,000 $4,200,000 Operating expenses (2,700,000) (3,500,000) Operating income before support department allocations $1,500,000 $700,000 Support department allocations: Training $(180.000) $(180,000) Flight scheduling (275,000) (275.000 Reservations (375,000) (375,000) Total support department allocations 5(830,000) $(830,000) Operating income (los) $670,000 $(130,000) The support department allocation rates for the support department costs were based on revenues. Because the revenues of the two divisions were the same the support department locations to each division were also the same The following additional information is available Passenger Division Cargo Division Total 600 200 800 Number of personnel trained Number of flights Number of reservations requested 1,000 1,500 2,500 30,000 0 30,000 a. Does the operating income (loss) for the two divisions accurately measure performance? Explain The reported operating Income accurately measure performance because the support department charges are based on Revenues associated with the profit center manager's use of the support department services 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 "O" Round your interim calculations to two decimal places, if required. Rocky Mountain Airlines Inc Divisional Income Statements For the Year Ended December 31, 2010 Passenger Division Cargo Division Operating Income before support department allocations Suport department allocations 1. Corred the divisional income statements, using the activity bases provided in revising the service department charges. If an amount box does not require an entry beave it blank, or enter "o". Round your interim calculations to two decimal places, if required Rocky Mountain Airlines Inc. Divisional Income Statements For the Year Ended December 31, 2019 Passenger Division Cargo Division Operating income before support department allocations Support department allocations: Total support department allocations