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

	Lake Region			Coastal Region
Sales revenue	$	4,200,000		$	13,020,000
Cost of sales		2,645,000			6,540,000
Allocated corporate overhead		252,000			781,200
Other general and administration		554,900			3,750,000

The results for year 2 have just been posted.

	Lake Region			Coastal Region
Sales revenue	$	4,200,000		$	9,720,000
Cost of sales		2,645,000			4,730,000
Allocated corporate overhead		315,000			729,000
Other general and administration		538,000			3,750,000

Required:

a. Compute divisional operating income for the two divisions.

b-1. What are the gross margin and operating margin percentages for both divisions?

b-2. How well have these divisions performed?