Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Prolit center responsbility reporting for a service company Thomas Raliroad Company organizes its three divisions, the North (N), South ( S ), and West (W)

image text in transcribed
image text in transcribed
image text in transcribed
Prolit center responsbility reporting for a service company Thomas Raliroad 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 : 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. if makes wire the right freight cars are at the ripht place at the right time, The Treasurer Department conducts a variety of servichs for the company as a whole. The following additional information has been gathered: 1. Prepare quarterly income stetements showing operating income for the three reglons. Use three column headings: North, South, and West, Do not round your interim calculations. 2. What is the profit margin of each region? Round to one decimal place. Identify the most successful region according to the profit margin. 2. What is the profit margin of each region? Round to one decimal place. Identify the most successful region according to the profit margin. 3. What would you include in a recommendation to the CEO for a better method for evaluating the performance of the regions? a. The method used to evaluate the performance of the regions should be reevaluated. b. A better regional performance measure would be the return on investment (operating income divided by regional assets). c. A better regional performance measure would be the residual income (operating income less a minimal return on regional assets). d. None of these choices would be included. e. All of these choices (a,b&c) would be included

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions