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Profit Center Responsibility Reporting Carry On Freight Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance using

Profit Center Responsibility Reporting

Carry On Freight Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31, 20Y3.

Revenues?Air Division$ 1,025,100
Revenues?Rail Division1,202,100
Revenues?Truck Division2,203,600
Operating Expenses?Air Division649,600
Operating Expenses?Rail Division715,400
Operating Expenses?Truck Division1,332,600
Corporate Expenses?Shareholder Relations155,900
Corporate Expenses?Customer Support595,000
Corporate Expenses?Legal164,000
General Corporate Officers' Salaries344,300

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:

Air Rail Truck
Number of customer contacts4,4005,3007,800
Number of hours billed1,0001,6001,400

Division management does not control activities related to the shareholder relations department and general corporate officers' salaries.

image text in transcribed
For the Quarter Ended December 31, 20Y3 Air Rail Truck Revenues 1,025,100 Operating expenses 649,600 Operating income before service department charges 375,500 Less service department charges: Customer support Legal 100100 Total service department charges Operating income 2. What is the profit margin percentage of each division? Round to one decimal place. Division Profit Margin Air Division /o Rail Division Truck Division

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