Timberline Corporation is a multi-divisional manufacturing company. Each of the two division managers has responsibility for sales, costs, and profitability. Division 1 has three manufacturing plants, while Division 2 has four plants that produce a variety of products as requested by the divisional marketing department. The divisional marketing department is responsible for setting prices, determining product mix, managing advertising, and meeting income projections. The division manager is responsible for coordinating production and marketing activities across the various levels within the division. Sales and operating data for each division are as follows:

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A. Construct an organization chart that illustrates the various levels of responsibility within Timberline.
B. Classify each level according to the responsibility centers identified in this chapter.
C. Identify appropriate performance measures for each level of responsibility. Justify your answer.
D. Calculate ROI for the two divisions. Evaluate the results of your calculation.

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Sales Cost of goods sold Gross margin Operating expenses Operating income Average assets Division 1 Division 2 $6,000,000 $10,000,000 6,000,000 $ 4,000,000 3,500,000 $ 500,000 $ 8,000,000 4,200,000 $1,800,000 1,000,000 $ 800,000 $7,000,000