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:

Line Item Description	Amount
RevenuesN Region	$1,279,000
RevenuesS Region	1,496,100
RevenuesW Region	2,774,700
Operating ExpensesN Region	810,500
Operating ExpensesS Region	890,400
Operating ExpensesW Region	1,678,000
Corporate ExpensesDispatching	732,600
Corporate ExpensesEquipment Management	217,300
Corporate ExpensesTreasurers	194,500
General Corporate Officers Salaries	429,600

The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurers 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 Treasurers Department conducts a variety of services for the company as a whole. The following additional information has been gathered:

Line Item Description	North	South	West
Number of scheduled trains	5,600	6,700	9,900
Number of railroad cars in inventory	1,000	1,600	1,500

Required:

Question Content Area

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.

Line Item Description	North	South	West
Revenues	$Revenues	$Revenues	$Revenues
Operating expenses	Operating expenses	Operating expenses	Operating expenses
Operating income before support department allocations	$Operating income before support department allocations	$Operating income before support department allocations	$Operating income before support department allocations
Support department allocations:
Dispatching	$Dispatching	$Dispatching	$Dispatching
Equipment Management	Equipment Management	Equipment Management	Equipment Management
Total support department allocations	$Total support department allocations	$Total support department allocations	$Total support department allocations
Operating income	$Operating income	$Operating income	$Operating income

Question Content Area

2. What is the profit margin of each region? Round to one decimal place.

Division	Profit Margin
North Region	fill in the blank 1 of 3 %
South Region	fill in the blank 2 of 3 %
West Region	fill in the blank 3 of 3 %