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Health Quest operates fitness centers and organizes its operations into three geographical areas: Western, Midwestern, and Eastern Divisions. The following shows Health Quests divisional income

Health Quest operates fitness centers and organizes its operations into three geographical areas: Western, Midwestern, and Eastern Divisions. The following shows Health Quests divisional income statements from last year.

WesternDivision

MidwesternDivision

EasternDivision

Total

Sales

$2,800,000

$2,226,000

$3,391,060

$8,417,060

Cost of sales

1,497,000

1,201,000

1,648,059

4,346,059

Gross margin

1,303,000

1,025,000

1,743,001

4,071,001

Operating expenses

503,000

385,000

663,000

1,551,000

Allocated corporate overhead

228,571

182,857

308,572

720,000

Operating income

571,429

457,143

771,429

1,800,001

Income tax (30%)

171,429

137,143

231,429

540,001

After-tax income

$ 400,000

$ 320,000

$ 540,000

$1,260,000

Required:

Calculate the gross margin ratio, the operating margin ratio, and the profit margin ratio for the three divisions of Health Quest.

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