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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 Revenues Operating expenses Income from operations before Passenger Division Cargo Division $2,738,000 $2,738,000 2,216,500 2,474,900 $521,500 $263,100 service department allocations Less service department cost allocations: Training $117,500 $117,500 Flight scheduling Reservations 99,000 132,000 99,000 348,500 132,000 348,500 Income from operations $173,000 $(85,400) The service department allocations rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department allocations to each division were also the same. The following additional information is available: Number of personnel trained Number of flights Number of reservations requested Passenger Division Cargo Total Division 360 140 500 380 520 900 17,600 0 17,600 b. Correct the divisional income statements, using the cost drivers provided in revising the service department cost allocations. If an amount box does not require an entry, leave it blank. Do not round your interim calculations. Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 20Y9 Passenger Division Revenues Operating expenses Income from operations before service department allocations Less service department cost allocations: Training Flight scheduling Reservations Income from operations Cargo Division

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 Revenues Operating expenses Income from operations before Passenger Division Cargo Division $2,738,000 $2,738,000 2,216,500 2,474,900 $521,500 $263,100 service department allocations Less service department cost allocations: Training $117,500 $117,500 Flight scheduling Reservations 99,000 132,000 99,000 348,500 132,000 348,500 Income from operations $173,000 $(85,400) The service department allocations rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department allocations to each division were also the same. The following additional information is available: Number of personnel trained Number of flights Number of reservations requested Passenger Division Cargo Total Division 360 140 500 380 520 900 17,600 0 17,600 b. Correct the divisional income statements, using the cost drivers provided in revising the service department cost allocations. If an amount box does not require an entry, leave it blank. Do not round your interim calculations. Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 20Y9 Passenger Division Revenues Operating expenses Income from operations before service department allocations Less service department cost allocations: Training Flight scheduling Reservations Income from operations Cargo Division

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter24: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 8E: Rocky Mountain Airlines Inc. has two divisions organized as profit centers, the Passenger Division...
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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 Revenues Operating expenses Income from operations before Passenger Division Cargo Division $2,738,000 $2,738,000 2,216,500 2,474,900 $521,500 $263,100 service department allocations Less service department cost allocations: Training $117,500 $117,500 Flight scheduling Reservations 99,000 132,000 99,000 348,500 132,000 348,500 Income from operations $173,000 $(85,400) The service department allocations rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department allocations to each division were also the same. The following additional information is available: Number of personnel trained Number of flights Number of reservations requested Passenger Division Cargo Total Division 360 140 500 380 520 900 17,600 0 17,600 b. Correct the divisional income statements, using the cost drivers provided in revising the service department cost allocations. If an amount box does not require an entry, leave it blank. Do not round your interim calculations. Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 20Y9 Passenger Division Revenues Operating expenses Income from operations before service department allocations Less service department cost allocations: Training Flight scheduling Reservations Income from operations Cargo Division
Transcribed Image Text: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 Revenues Operating expenses Income from operations before Passenger Division Cargo Division $2,738,000 $2,738,000 2,216,500 2,474,900 $521,500 $263,100 service department allocations Less service department cost allocations: Training $117,500 $117,500 Flight scheduling Reservations 99,000 132,000 99,000 348,500 132,000 348,500 Income from operations $173,000 $(85,400) The service department allocations rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department allocations to each division were also the same. The following additional information is available: Number of personnel trained Number of flights Number of reservations requested Passenger Division Cargo Total Division 360 140 500 380 520 900 17,600 0 17,600 b. Correct the divisional income statements, using the cost drivers provided in revising the service department cost allocations. If an amount box does not require an entry, leave it blank. Do not round your interim calculations. Wild Sun Airlines Inc. Divisional Income Statements For the Year Ended December 31, 20Y9 Passenger Division Revenues Operating expenses Income from operations before service department allocations Less service department cost allocations: Training Flight scheduling Reservations Income from operations Cargo Division
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