Johnson Company has three operating segments. The managers of each segment have decision-making authority regarding pricing, cost control and asset investment. The following information is available for the three segments for the third quarter of 2014:

		Alpha	Beta	Delta
Revenues		$790,000	$1,245,000	$990,000
Operating Expenses		$560,000	$960,000	$700,000
Invested Assets		$1,600,000	$2,000,000	$2,080,000
Number of Transactions		120,000	150,000	130,000
Desired Minimum ROI		12.0%	12.0%	12.0%

The company has a centralized accounting system. For financial reporting purposes, accounting department costs and common corporate costs are allocated to the segments as follows:

Accounting Department (number of transactions)	$60,000
Corporate Headquarters' Costs (per revenue dollar)	$810,000

REQUIRED:

Part 1: Prepare a report showing the operating incomes of the three segments for performance evaluate purposes.

Part 2: Identify the most successful segment according to each of the following measurements: (Show supporting calculations.)

Segment profit margin

Segment return on investment

Segment residual income

Part 3: Which of the measurements in Part 2 would you recommend for comparing the performance of the segments? Why?