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| A. By allocating overhead based on direct labor hours, calculate the 1. total budgeted cost of the Manufacturing Department. 2. unit standard cost of Tuff Stuff. 3. unit standard cost of Ruff Stuff. B. After separation of overhead into activity pools, compute the total budgeted cost of the 1. Fabricating Department. 2. Assembly Department. C. Using activity-based costing, calculate the unit standard costs for 1. Tuff Stuff. 2. Ruff Stuff. D. Discuss how a decision by Alyssa Manufacturing regarding the continued production of Ruff Stuff will be affected by the results of your calculations in Requirement C.  A. Calculate the following performance measures for the year just ended for the Presser Division of Lawton Industries. 1. Return on average investment in operating assets employed (ROI). 2. Residual income calculated on the basis of average operating assets employed. B. Would the management of Presser Division have been more likely to accept the investment opportunity it had during the year if residual income were used as a performance measure instead of ROI? Explain you answer. Page 14 C. The Presser Division is a separate investment center with Lawton Industries. Identify and describe the items Presser must control if it is to be evaluated fairly by either the ROI or residual income performance measures. |