assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead $($all fixed$)$ is allocated to the regions based on regional gross margin $($regional revenue minus regional cost of sales$).$

The following information is from Lauderdale's first year of operations:

$\backslash$table$[[,,,,$Total$],[$Revenues$,$Region I,Region II$,$Region III,Corporation$],[$Cost of sales,$1,220,000,$$$1,686,000,$$$2,270,000,$$$5,176,000$