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Profit Center Responsibility Reporting Carry On Freight Inc. has three regional division organised a prontcenters. The chief executive officer (CEO) evaluates divisionat performance using operating

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Profit Center Responsibility Reporting Carry On Freight Inc. has three regional division organised a prontcenters. The chief executive officer (CEO) evaluates divisionat performance using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balances of December 31, 2013 Revenues-Air Division 5 1.110,000 Revenues-Rail Division 1,317,500 Revenues-Truck Division 2,400,000 Operating Expenses Air Division 703,400 Operating Expenses-Ral Division 71,100 Operating pennes-Truck Division 1456,000 Corporate Expenses-Shareholder Relations 165,800 Corporate Expenses --Customer Support 607,600 Corporate Expenses --Legal 220,000 General Corporate more Salaries 372,800 The company operates the service departments Shareholder Relations, Customer Support, and legal. The Shareholder Relation Department conductes 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 bilied is an activity base for this work. The following additional information has been gathered Check My Work more Check My Work uses remaining Previous All Hall Yuck Number of customer conta 0,00 0,00) Number of 1,200 1,900 1,700 Dion management does not on the shareholder reis der er process Required 1. Prepare quarterly income statements showing operating income for the tree divisions, ses conna A, B, Truck Carry On Freight Inc Divisional Income Statements For the Quarter Ended December 31, 2013 AL Ral Thuck ED Less service department charges Total service department charges Operating income 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 99 Rail Division Truck Division 96 Identity the most successful division according to the profit margin percentage 3. Complete the memo to the CEO for a better method for evaluating the performance of the divisions in your recommendation, Identify the major weakness of the present method. You might include the following: MEMORANDUM : CEO FROM: Accountant SUBJECT: Methods to Evaluate Division Performance The method used to evaluate the performance of the divisions should be reevaluated. The present method identifies the amount of por dollar of earned revenue. This is a measure Division Profit Margin Air Division Hail Division Truck Division Identify the most succes division according to the front margin page 3. Complete the meme to the CEO for a better method for evaluating the performance of the In Your recommend the major weakness of the present method. You might include the following -MEMORANDUM TO CEO FROM: Accountant SUBJECT: Methods to Evaluate Division Puma The method used to evaluate the performance of the should be revaluated. The present method identifies the amount of per dollar of med. This is a measure that would satisfy the response of However, this company requires Significant investment in The present me torporate the impact of into the measure. Therefore, two better measures of divisional performance would that are used in be Previous

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