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a. Compute the division ROI for each of the three regions. b. How have these regions performed? Complete this question by entering your answers
a. Compute the division ROI for each of the three regions. b. How have these regions performed? Complete this question by entering your answers in the tabs below. Required A Required B Compute the division ROI for each of the three regions. Note: Do not round intermediate calculations. Enter your answers as percentage rounded to 1 decimal place (i.e. 32.1). Division ROI Region I Region II Region III % % % Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Revenues Cost of sales Selling, General and Administrative (all fixed) Corporate overhead Region I $ 1,218,000 459,000 447,000 Region II $ 1,668,000 819,000 657,000 Region III $ 2,268,000 1,149,000 877,000 Total Corporation $ 5,154,000 2,427,000 Information on the division assets in the three regions of Lauderdale Corporation follows: Region I Region II Region III $ 718,000 648,000 1,314,500 1,981,000 468,000
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