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Bramble Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the

Bramble 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 $385,000 $454,000
Direct materials costs $40,000 $50,000
Direct labor costs 140,000 260,000
Overhead costs 120,000 300,000 184,000 494,000
Operating income (loss) $85,000 $(40,000)

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

Scheduling and travel $120,000 Hours of travel
Setup time 144,000 Number of setups
Supervision 40,000 Direct labor cost

Estimated Use of Cost Drivers per Product

Commercial

Residential

Scheduling and travel 800 700
Setup time 550 250

(a1)

Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 0.38.)

Overhead Rates

Scheduling and travel

$enter a dollar amount per hour rounded to 2 decimal places

per hour

Setup time

$enter a dollar amount per setup rounded to 2 decimal places

per setup

Supervision

$enter an amount per dollar rounded to 2 decimal places

per dollar

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