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Vernon Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Operating income Average operating assets Company's desired rate

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Vernon Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Operating income Average operating assets Company's desired rate of return Division A $209,000 $ 16,000 $ 56,000 15% Division B $ 89,000 $ 8,500 $38,000 15% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is

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