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

Temasec Airlines, Inc. Divisional Income Statements For the Year Ended June 30, 2012
	Passenger Division		Cargo Division
Revenues	$2,043,000			$2,043,000
Operating expenses	1,653,780			1,838,570
Income from operations before service department charges	$ 389,220			$ 204,430
Less service department charges:
Training	$ 74,250		$ 74,250
Flight scheduling	$ 82,875		$ 82,875
Reservations	$ 105,750	$ 262,875	$ 105,750	$ 262,875
Income from operations		$ 126,345		$ (58,445)

The service department charge rate for the service department costs was based on revenues. Since 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	230		100		330
Number of flights	320		430		750
Number of reservations requested	14,100		0		14,100

b. Correct the divisional income statements, using the activity bases provided above in revising the service department charges. Temasec Airlines, Inc. Divisional Income Statements For the Year Ended June 30, 2012 Passenger Division Cargo Division $ $ Income from operations before service department charges $ $ Less service department charges: $ $ $ $

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