Profit center responsibility reporting for a service company Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, 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: Revenues-N Region Revenues-S Region Revenues-W Region Operating Expenses-N Region Operating Expenses-S Region Operating Expenses-W Region Corporate Expenses-Dispatching Corporate Expenses-Equipment Management Corporate Expenses-Treasurer's General Corporate Officers' Salaries $1,341,200 1,567,000 2,961,900 849,900 932,600 1,791,200 812,000 191,400 204,000 450,400 The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurer's Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the railroad cars inventories. It makes sure 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 additional information has been gathered: Number of scheduled trains Number of railroad cars in inventory Required: North South West 5,800 800 7,000 1,300 10,400 1,200 1. Prepare quarterly income statements showing operating income for the three regions. Use three column headings: North, South, and West. Do not round your interim calculations. Thomas Railroad Company Divisional Income Statements For the Quarter Ended December 31 Line Item Description Revenues North South West Operating expenses Operating income before support department allocations Support department allocations: Dispatching Equipment Management Total support department allocations Operating income Feedback Check My Work 1. Determine the dispatching rate per train by dividing service cost by output. For each region's dispatching cost, multiply the dispatching rate by the number of scheduled trains. Repeat this process for the other support department allocations. Subtract the support department allocations for a region from that region's operating income before such allocations. 2. What is the profit margin of each region? Round to one decimal place. Division North Region South Region West Region Profit Margin % % %