Managerial Accounting

Blair Chemical has three divisions. Its consumer products division continually faces strong competition from companies in foreign countries. At he most recent senior management meeting, John Hampstead, head of the division, reported that his division's sales for the year were expected to come in below the break-even point. When the final results for the year were reported, Seaborn Blair, the company president, was surprised to learn that the consumer products division actually reported a profit in excess of $200,000.

Assuming the role of John Hampstead, you have been invited to the president's office to share your insight on this puzzling circumstance, and prior to the meeting, you need to prepare an analysis to explain the results.

Explain how you would address the inconsistency.