Gletchen Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Operating income Average operating assets Company's desired rate of return Division A $ 480,000 $ 32,000 $ 200,000 Required a. Compute each division's residual income. b. Which division increased the company's profitability more? a. Division A a. Division B b. The division that increased the company's profitability more is 10% Division B $ 300,000 $ 24,000 $ 160,000 Residual Income 10%

Gletchen Cough Drops operates two divisions. The following information pertains to each division for Year 1. Required a. Compute each division's residual income. b. Which division increased the company's profitability more