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Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs,...

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Accounting

Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales).
The following information is from Lauderdale's first year of operations:
Region I Region II Region III Total Corporation
Revenues $ 1,215,000 $ 1,665,000 $ 2,265,000 $ 5,145,000
Cost of sales 457,500817,5001,147,5002,422,500
Selling, General and Administrative (all fixed)442,500652,500872,5001,967,500
Corporate overhead 462,000
Information on the division assets in the three regions of Lauderdale Corporation follows:
Region I $ 715,000
Region II 645,000
Region III 1,310,000
Required:
Compute the division ROI for each of the three regions.
How have these regions performed?

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