Compute Divisional Income
Eastern Merchants shows the following information for its two divisions for year 1:
|
|
Eastern |
Western |
|
Revenue |
$1,200,000 |
$3,800,000 |
|
Cost of sales |
769,500 |
1,900,000 |
|
Allocated corporate overhead |
72,000 |
228,000 |
|
Other general and administration |
158,500 |
1,100,000 |
Required
Compute divisional operating income for the two divisions. Ignore taxes. How well have these divisions performed?