Logan Oil Change operates two divisions. The following pertains to each division for 2018:
Concord Kinston
Sales................................................. $900,000...................... $750,000
Operating income................................... $ 60,000....................... $ 46,500
Average operating assets.......................... $225,000...................... $150,000
Company's desired rate of return....................... 9% ..............................9%
Required
a. Compute each division's residual income.
b. Which division increased the company's profitability more?