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Adams Cough Drops operates two divisions. The following information pertains to each division for Year 1 . Division ADivision BSales$ 2 0 3 , 0

Adams Cough Drops operates two divisions. The following information pertains to each division for Year

1 .

Division ADivision BSales$

203, 000

78, 000

Operating income$

17, 000

9, 200

Average operating assets$

59, 000

37, 000

Company's desired rate of return

13 % 13 %

RequiredCompute each divisions residual income.Which division increased the companys profitability more?

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