Wyalusing Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers' lots. Wyalusing expanded into the precut housing market when it acquired Fairmont Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers' lots for assembly. Wyalusing designated the Fairmont Division as an investment center. Wyalusing uses return on investment (ROI) as a performance measure with investment defined as average productive assets. Management bonuses are based in part on ROl. All investments are expected to earn a minimum return of 12 percent before income taxes. Fairmont's ROl has ranged from 24.5 to 27.7 percent since it was acquired. Fairmont had an investment opportunity in 20x1 that had an estimated ROl of 23 percent. Fairmont's management decided against the investment because it believed the investment would decrease the division's overall ROI. The 20x1 income statement for Fairmont Division follows. The division's productive assets were $16,800,000 at the end of 20x1, a 5 percent increase over the balance at the beginning of the year Part 1 of2 points FAIRMONT DIVISION Income Statement For the Year Ended December 31, 20x1 (in thousands) eBook Sales revenue Cost of goods sold $64,200 41,100 $23,100 References Gross margin Operating expenses: Administrative Selling $5,230 13,770 19,000 $ 4,100 Income from operations before income taxes Exercise 13-29 Part 1 Required 1-a. Calculate the return on investment (ROI) for 20x1 for the Fairmont Division 1-b. Calculate residual income for 20x1 for the Fairmont Division. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Calculate the return on investment (ROI) for 20x1 for the Fairmont Division urn on investment Complete this question by entering your answers in the tabs below. Req 1A Req 1B Calculate residual income for 20x1 for the Fairmont Division. (Enter your answer in dollars and not in thousands.) idual income