Lauderdale Corporation is organized in three geographical divisions $($regions$)$ with managers responsible for revenues, costs, and 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:

Region I Region II Region III Total Corporation

Revenues $ $1,200,000$ $ $1,650,000$ $ $2,250,000$ $ $5,100,000$

Cost of sales $450,000810,0001,140,0002,400,000$

Selling, General and Administrative $($all fixed$)420,000630,000850,0001,900,000$

Corporate overhead $432,000$

Required:

Compute divisional operating income for the three regions. Ignore taxes.

How have these regions performed? $1$a$.$ Based on divison income, which region performed the best? $1$b$.$ Based on division income, which region performed the worst? $2$a$.$ Which region has the highest gross margin percentage? $2$b$.$ Which region has the lowest gross margin percentage? $3$a$.$ Which region has the highest operating margin percentage? $3$b$.$ Which region has the lowest operating margin percentage?