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Arlington Clothing, Inc., shows the following information for its two divisions for year 1: Sales revenue Cost of sales Allocated corporate overhead Other general and
Arlington Clothing, Inc., shows the following information for its two divisions for year 1: Sales revenue Cost of sales Allocated corporate overhead Other general and administration Lake Region $4,060,000 2,605,000 243,600 541,900 Coastal Region $12,940,000 6,505,000 776,400 3,720,000 The results for year 2 have just been posted: Sales revenue Cost of sales Allocated corporate overhead Other general and administration Lake Region $4,060,000 2,605,000 304,500 548,000 Coastal Region $9,580,000 4,770,000 718,500 3,720,000 Required: a. Compute divisional operating income for the two divisions. (Enter your answers in thousands of dollars rounded to 1 decimal place.) Answer is complete but not entirely correct. Lake Region $ 669,500.0 Coastal Region $ 1,938,600.0 % Operating income b-1. What are the gross margin and operating margin percentages for both divisions? (Enter your answers as a percentage rounded to 2 decimal places (i.e., 32.12).) Answer is complete but not entirely correct. Lake Region Coastal Region 35.84 % 49.73 X % Gross margin percentage Operating margin 16.49 X % 14.98 % b-2. How well have these divisions performed? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answ and double click the box with the question mark to empty the box for a wrong answer.) The reported divisional income for the Lake Region went down because sales fell in Coastal Region. Corporate overhead is allocated on the basis of relative revenues. Corporate overhead is allocated on the basis of absolute revenues. The performance of the Lake Region is affected by the results in the Coastal Region. The operating margin is greater in Lake Region. The gross margin percentage is higher in Coastal Region
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