Arlington Clothing, Inc., shows the following information for its two divisions for year 1.
Lake RegionCoastal RegionSales revenue$4,080,000 $12,920,000 Cost of sales 2,616,300 6,460,000 Allocated corporate overhead 244,800 775,200 Other general and administration 538,900 3,740,000
The results for year 2 have just been posted.
Lake RegionCoastal RegionSales revenue$4,080,000 $9,520,000 Cost of sales 2,616,300 4,760,000 Allocated corporate overhead 306,000 714,000 Other general and administration 538,900 3,740,000
Required:
a. Compute divisional operating income for the two divisions for year 2.
b-1. What are the gross margin and operating margin percentages for year 2 for both divisions?
b-2. How well have these divisions performed?