Profit Center Responsibality Reporting for a Service Company Thomas Failroad Company organizes its three divitions, the North (W), South (S), and West (W) regions, as profit centers. The chief excecutive officer (CEO) evaluates divisional performance using income from operations as a percent of revenues. The following quarterfy income and expense accounts were provided from the trial balance as of Decenber 311 The company operates three service departments: the Dhpatching Department, the Equipment Management Department, and the Treasurer's Department. The Treasurer's Department and general corporate officen' salaries are not contrclable by divisien management. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Departmeat manages the enventories of railroad cars. It makes sume the right freight cars are at the right place at the right. time. The Treasurer's Department conducts a variety of services for the company as a whole. The following addaional information has been gathered: Fhequired 1 1. Prepare quarterly income statements showing income from operations for the three regions. Use three columa headingt: North, South, and West. Do not round your interim calculations. 2. What is the profit margin of each division? Round to one decimal place. Identify the most successful reglon according to the probit margin. 3. What would you include in a recomimendation to the CEO for a better mothod for evaluating the performance of the divisions? a. The method used to evaluate the performance of the divisions should be rervaluated. b. A better divisional performance measure would be the fate of roturn on investrent (inceme from cperations divided by divisional assets). c. A better divisional performance measure vould be the residual income (income from operations less a minimal return on divional assets) d. Wone of these choices would be inchuded. e. All of these choices (a,b b c) would be included