Owen Audio shows the following information for its two divisions for year 1.

	Consumer Division	Commercial Division
Sales revenue	$ 1,838,000	$ 5,816,000
Cost of sales	1,103,600	3,781,100
Selling, General and Administrative	277,400	350,840
Allocated corporate overhead	130,520	408,980

The results for year 2 have just been posted.

	Consumer Division	Commercial Division
Sales revenue	$ 2,688,000	$ 5,816,000
Cost of sales	1,479,300	3,781,100
Selling, General and Administrative	287,602	349,040
Allocated corporate overhead	169,418	366,482

Required:

a. Compute divisional operating income for the two divisions for year 2.

b-1. What are the gross margin and operating margin percentages for year 2 for both divisions?

b-2a. Based on divisional income, which division performed better?

b-2b. Based on profitability ratios, which division performed better?