Arlington Clothing, Inc., shows the following information for its two divisions for year 1.

	Lake Region	Coastal Region
Sales revenue	$	4,120,000		$	13,030,000
Cost of sales		2,671,300			6,515,000
Allocated corporate overhead		247,200			781,800
Other general and administration		549,900			3,751,000

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?