Segmented Net Income, ROI, and RI. Custom Auto Company has two divisionsEast and West. The following segmented financial information is for the most recent fiscal year:

	East Division	West Division
Sales	$2,000,000	$4,000,000
Cost of goods sold	800,000	2,040,000
Allocated overhead	600,000	1,200,000
Selling and administrative expenses	360,000	380,000

The East division had average operating assets totaling $1,800,000 for the year, and the West division had average operating assets of $2,600,000. Assume the cost of capital rate is 8 percent, and the companys tax rate is 30 percent. Division managers are responsible for sales, costs, and investments in assets.

Required:

1. What type of responsibility center is each division at Custom Auto Company? Explain.
2. Prepare a segmented income statement. Include the profit margin ratio for each division at the bottom of the segmented income statement.
3. Calculate ROI for each division.
4. Calculate RI for each division.
5. Summarize the answers to parts a, b, and c. What does this information tell us about each division?