Wild Sun Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared:

WILD SUN AIRLINES INC.

Divisional Income Statements

For the Year Ended December 31, 20Y9

1		Passenger Division	Cargo Division
2	Revenues	$3,065,000.00	$3,065,000.00
3	Operating expenses	2,425,000.00	2,754,000.00
4	Income from operations before service department charges	$640,000.00	$311,000.00
5	Less service department charges:
6	Training	$135,150.00	$135,150.00
7	Flight scheduling	97,200.00	97,200.00
8	Reservations	151,400.00	151,400.00
9	Total service department charges	$383,750.00	$383,750.00
10	Income from operations	$256,250.00	$(72,750.00)

The service department charge rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department charges to each division were also the same.

The following additional information is available:

	Passenger Division	Cargo Division	Total
Number of personnel trained	310	200	510
Number of flights	800	1,000	1,800
Number of reservations requested	22,000	0	22,000

	Required:
A.	Does the income from operations for the two divisions accurately measure performance? Explain.
B.	Correct the divisional income statements, using the activity bases provided in revising the service department charges. If there is no amount or an amount is zero, enter "0". Do not round interim calculations.