ALLEEATOR Exercise 17-14 al-a2, b 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 $280,000 $484,000 Direct materials costs $30,000 $50,000 Direct labor costs 120,000 280,000 Overhead costs 78,000 225,000 184,000 514,000 Operating income (loss) $60,000 (30.000) 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 baseredes in dose proximity to the company office, so travel costs are not as expensive ona per dient visit for residential customers. Az 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 Estimated Activity Cost Pools Overhead Cost Drivers Scheduling and travel $78,000 Hours of trave Setup time 84,000 Number of setups Supervision 100,000 Direct labor com Estimated Use of Cost Drives per Product Commercial Residential Scheduling and travel 700 800 Setup te 950 250 Compute the activity based overhead rates for each of the three pools (Rooder von decimal) Overhead Rates CALCULATOR FULL SCH Compute the activity based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal places, e.g. 0.38) Overhead Rates per hour Scheduling and travel $ ho Setup time $ per setup Supervision per dollar $ dy Determine the overhead cost assigned to each product line Commercial Residential Scheduling and travel $ Setup time $ $ Supervision $ Total cost assigned 5 Compute the operating income for each product line, using the activity-based overhead rates Operating income (loss) Commercial $ Residential 5 Click if you would like to show Work for this question: One Show Work Question Attempts: Unlimited