Instructions Quarterly Income Statements Final Questions Instructions Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues East Revenues-West Revenues Central Operating Expenses-East $ 888,000 1,032,000 1,870,000 567,500 Operating Expenses-West 625,200 Operating Expenses-Central 1,173,140 Corporate Expenses--Shareholder Relations 152,000 Corporate Expenses-Customer Support 340,000 Corporate Expenses-Legal General Corporate Officers' Salaries 272,600 282,500 The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company's point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered: East West Central Number of customer contacts 5,000 6,000 9,000 Number of hours billed 1,350 2,000 2,450 Required: 1. Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central. 2. Identify the most successful division according to the profit margin. Enter percentage rounded two decimal places (e.g. 0.22547 is 22.55%). 3. What would vou include in a recommendation to the CEO for a better method for evaluating the performance of the divisions? What is a maior Previou