Stuart Cough Drops operates two divisions. The following information pertains to each division for Year 1. Division A $ 205,000 $15, 100 $ 56,000 Sales Operating income Average operating assets Company's desired rate of return Required 13% a. Compute each division's residual income. b. Which division increased the company's profitability more? a. Division A a. Division B b. The division that increased the company's profitability more is Division B $ 72,000 $ 9,800 $ 38,000 Residual Income 13%

Stuart Cough Drops operates two divisions. The following information pertains to each division for Year 1. Required a. Compute each division's residual income. b. Which division increased the company's profitability more