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

	Lake Region			Coastal Region
Sales revenue	$	4,200,000		$	12,990,000
Cost of sales		2,610,000			6,515,000
Allocated corporate overhead		252,000			779,400
Other general and administration		556,900			3,760,000

The results for year 2 have just been posted.

	Lake Region			Coastal Region
Sales revenue	$	4,200,000		$	9,560,000
Cost of sales		2,610,000			4,700,000
Allocated corporate overhead		315,000			717,000
Other general and administration		543,000			3,760,000

Required:

a. Compute divisional operating income for the two divisions for year 2.

b-1. What are the gross margin and operating margin percentages for year 2 for both divisions?

b-2. How well have these divisions performed?