The theme LO W 5 27.000 . ich werden beste hing the chedding dream of completed Meer weergevene potis variety of services for the company whole We 1504 1300 They Deco Required: 1. Prepare quarterly income statements showing income from operations 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 North South West Revenge Operating expenses Income from operations before service department charges Service department charges Dispatching Equipment Management Total service department charges QOD DIJO . Income from operations 2. What is the profit margin of nach division Round to one decimal place Region Profit Margin North Region South Region West Region Identify the most succesul 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 division 2. The method used to evaluate the performance of the divisions should be revaluated. b. A better divisional performance measure would be the rate of return on investment Income from operations divided by divisional asets) A better divisional performance measure would be the ruldual income (Income from operations tess a minimal return on divisional d. None of these choices would be included All of these choices (ab 8 c) would be included con perting for a Service Thomas Broad Cranesite the other sources. The final perform The following out income and from the concert Neon 1151.00 5 1.034.00 Tevens-W Redon 101400 Operating Expenses-Neion 39.100 Operating - Region 27.500 Operating Exen Weion 1,097,200 Corporate penser-patching Corporate Expense-ment Management 225.00 Corporate Exper's 120,000 General Corporate Office Salaries 2.100 The company operates three dientheti mentenant Management, and the Department The Dream The Entreprent manage the race. It makes the right freight cars the right place. The Death The following additional information has been the West Number of scheduled traine 4.500 5.400 B100 Number of cars inventary 900 1,300 income honing income from for the whole Thomas Hard Com Division statements For the Ouarter Ended December How 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 The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues-N Region $851,800 Revenues-- Region 1,054,900 Revenues-W Region 1,814,300 Operating Expenses-N Region 539,800 Operating Expenses - Region 627,800 Operating Expenses-W Region 1,097,200 Corporate Expenses-Dispatching 414,000 Corporate Expenses-Equipment Management 225,700 Corporate Expenses-- Treasurer's 129,600 General Corporate Officers' Salaries 286,100 The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasur The Equipment Management Department manages the railroad cars inventories. It makes sure the right freight cars are at the right place a The following additional information has been gathered: North South West Number of scheduled trains 4,500 5,400 8.100 Number of railroad cars in inventory 900 1,500 1,300 Required: 1. Prepare quarterly Income statements showing income from operations for the three regions. Use three column headings: North, South, an Thomas Railroad Company Divisional Income Statements For the Quarter Ended December 31 North South West Revenues 851,300 1.054,900 1.814.300 Operating expenses 539.800 627,800 1.097 200 Income from operations before service department charges Service department charges: 312.000 427.100 717.100 Required: 1. Prepare quarterly income statements showing income from operations for the three regions. Use three column headings: North, South, and West. Thomas Railroad Company Divisional Income Statements For the Quarter Ended December 31 North South West Revenues 851.800 1,054.900 1,814300 Operating expenses 5:39,800 627,800 1,097,200 Income from operations before service department charges 312,000 427.100 717.100 Service department charges: Dispatching Equipment Management Total service department charges Income from operations 2. What is the profit margin of each division Round to one decimal place Region Profit Margin North Region %6 South Region West Region 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 divisions? a. The method used to evaluate the performance of the divisions should be reevaluated, b. A better divisional performance measure would be the rate of return on investment income from operations divided by divisional assets). A better divisional performance measure would be the residual income income from operations less a minimal return on divisional assets) d. None of these choices would be included e. All of these choices (a, b & c) would be induced