Exercise 15-15A (Algo) Residual Income LO 15-7 Franklin Cough Drops operates two divisions. The following information pertains to each division for the year. Sales Operating income Division A Division B $219,000 $89,000 $ 15,600 $ 8,100 $ 58,000 $40,000 12% 12% Average operating assets Company's desired rate of return Required a. Compute each division's residual income. b. Which division increased the company's profitability more? a Division A Division B b. The division that increased the company's profitability more is Residual Income