nts PR 23-2A Profit center responsibility for a service company 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 $1.400.000 Revenues-West 2.000.000 Revenues-Central 3,200,000 Operating Expenses-East 800,000 Operating Expenses-West 1,350,000 Operating Expenses-Central 1.900.000 Corporate Expenses--Shareholder Relations 300,000 Corporate Expenses-Customer Support 320.000 Corporate Expenses-Legal 500,000 General Corporate Officers Salaries 1.200,000 Hub 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 Number of hours billed 1,500 750 2.800 1.750 5,700 1,500 Instructions 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. (Round to the nearest whole percent.)