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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
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: Required: a. Compute divisional operating income for the three regions. Ignore taxes. b. How have these regions performed? Complete this question by entering your answers in the tabs below. Compute divisional operating income for the three regions. Ignore taxes. \begin{tabular}{l} \hline \multicolumn{1}{|l|}{ Required A Required B } \\ How have these regions performed? \\ \hline 1a. Based on division income, which region performed the best? \\ \hline 1b. Based on division income, which region performed the worst? \\ \hline 2a. Which region has the highest gross margin percentage? \\ \hline 2b. Which region has the lowest gross margin percentage? \\ \hline 3a. Which region has the highest operating margin percentage? \\ \hline 3b. Which region has the lowest operating margin percentage? \\ \hline \end{tabular}
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