Arlington Clothing, Inc., shows the following information for its two divisions for year 1. Lake Region Coastal Region Sales revenue $ 4,160,000 $ 13,070,000 Cost of sales 2,691,300 6,535,000 Allocated corporate overhead 249,600 784,200 Other general and administration 553,900 3,755,000 Required: a. Compute divisional operating income for the two divisions. Ignore taxes. b-1. What are the gross margin and operating margin percentages for both divisions? b-2. How well have these divisions performed?
Arlington Clothing, Inc., shows the following information for its two divisions for year 1. Lake Region Coastal Region Sales revenue $ 4,160,000 $ 13,070,000 Cost of sales 2,691,300 6,535,000 Allocated corporate overhead 249,600 784,200 Other general and administration 553,900 3,755,000 Required: a. Compute divisional operating income for the two divisions. Ignore taxes. b-1. What are the gross margin and operating margin percentages for both divisions? b-2. How well have these divisions performed?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.8E: Corrections to service department charges Panda Airlines Inc. has two divisions organized as profit...
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Arlington Clothing, Inc., shows the following information for its two divisions for year 1.
Lake Region | Coastal Region | |||||
Sales revenue | $ | 4,160,000 | $ | 13,070,000 | ||
Cost of sales | 2,691,300 | 6,535,000 | ||||
Allocated corporate overhead | 249,600 | 784,200 | ||||
Other general and administration | 553,900 | 3,755,000 | ||||
Required:
a. Compute divisional operating income for the two divisions. Ignore taxes.
b-1. What are the gross margin and operating margin percentages for both divisions?
b-2. How well have these divisions performed?
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