Reference no: EM13578654

Johnson Products 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, 2012:

Revenues-East	$ 1,066,100
Revenues-West	1,298,500
Revenues-Central	2,187,200
Operating Expenses-East	675,600
Operating Expenses-West	772,800
Operating Expenses-Central	1,322,700
Corporate Expenses-Shareholder Relations	162,100
Corporate Expenses-Customer Support	457,500
Corporate Expenses-Legal	326,400
General Corporate Officer's Salaries	358,100

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 company's 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	4,600		5,500		8,200
Number of hours billed	1,300		2,000		1,800

Required:

a. Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central.

b. What is the profit margin percentage of each division? Round to one decimal place.

Division	Profit Margin
East Division	%
West Division	%
Central Division	%

Identify the most successful division according to the profit margin percentage.