Traxonia Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31, 2016: RevenuesEast $ 884,000 RevenuesWest 1,050,000 RevenuesCentral 1,870,000 Operating ExpensesEast 568,100 Operating ExpensesWest 623,520 Operating ExpensesCentral 1,170,540 Corporate ExpensesShareholder Relations 157,000 Corporate ExpensesCustomer Support 407,000 Corporate ExpensesLegal 261,000 General Corporate Officers Salaries 270,750 The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the companys 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 billed is an activity base for this work. The following additional information has been gathered: East West Central Number of customer contacts 4,500 5,500 8,500 Number of hours billed 1,350 2,160 2,290 Required: 1. Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central. 2. Identify the most successful division 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?