K ISPStar offers Internet, phone, and television services to customers in Wyoming. (Click the icon to view additional information.) The following information is available for the forthcoming period: (Click the icon to view the information.) Read the requirements. Requirement 1. Prepare a cost-hierarchy income statement for ISPStar assuming corporate costs are not allocated to each division. (Use parentheses or a minus sign to enter an operating loss.) Income Statement Component Urban Rural Total Operating income (loss) Data table Revenues Customer-level costs Customer-level operating income Customer-level operating income percentage Service-hours worked Urban Division Rural Division Total 4,840,000 $ 2,800,000 2,040,000 $ 3,960,000 $ 8,800,000 2,700,000 5,500,000 1,260,000 $3,300,000 42.15% 6,000 hours 31.82% 37.5% 12,000 hours 18,000 hours In addition to the customer-level costs above, the company expects to incur $2,250,000 of corporate costs. Print Done Requirements 1. Prepare a cost-hierarchy income statement for ISPStar assuming corporate costs are not allocated to each division. 2. Allocate the corporate costs to each division and calculate the income of each division after assigning corporate costs based on revenues of each division. 3. Allocate the corporate costs to each division and calculate the income of each division after assigning corporate costs based on service-hours worked in each division. 4. What are the advantages and disadvantages of ISPStar allocating corporate overhead costs to the two divisions? 5. Based on your answers to requirements 1 through 4, should Leonard close down the Rural Division? Explain. Print Done Requirement 1. Prepare a cost-hierarchy income statement for ISPStar assuming corporate costs are not allocated to each division. (Use parentheses or a minus sign to enter an operating loss.) Income Statement Component Urban Total Rural Corporate costs Customer-level costs Customer-level operating income Revenues [ - Requirements