2. determine the overhead cost assigned to each product line. round to 0 decimal places. 3. compute the operating income for each product line, using the activity-based overhead rates. round answers to 0 decimal placed

Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year. Commercial Residential Revenues $302,500 $451,000 Direct materials costs $40,000 $50,000 Direct labor costs 110,000 290,000 Overhead costs 67,500 217,500 136,000 476,000 Operating income (loss) $85,000 $(25,000) The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed: Activity Cost Pools Estimated Overhead Cost Drivers Activity Cost Pools Estimated Overhead Cost Drivers Scheduling and travel $67,500 Hours of travel Setup time 96,000 Number of setups Supervision 40,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 750 600 Setup time 350 250 (a1) Compute the activity-based overhead rates for each of the three cost pools. Overhead Rates Scheduling and travel $ 50 per hour Setup time $ 160 per setup Supervision 0.17 %