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

	Lake Region			Coastal Region
Sales revenue	$	4,200,000		$	13,010,000
Cost of sales		2,665,000			6,525,000
Allocated corporate overhead		252,000			780,600
Other general and administration		557,900			3,750,000

The results for year 2 have just been posted.

	Lake Region			Coastal Region
Sales revenue	$	4,200,000		$	9,540,000
Cost of sales		2,665,000			4,850,000
Allocated corporate overhead		315,000			715,500
Other general and administration		550,000			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?