Ch17 Q10 a2

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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. Revenues Direct materials costs Direct labor costs Overhead costs Operating income (loss) Commercial $342.000 $35.000 120,000 102.000 257.000 $85.000 Residential $477000 $50,000 280,000 172.000 502.000 S(25000) 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 dient 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 the developed Activity Cost Pools Scheduling and travel Setup time Supervision Estimated Overhead $102,000 112.000 60,000 Cost Drivers Hours of travel Number of setups Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 800 Setup time 450 250 (a 1) Your answer is correct Compute the activity based overhead rates for each of the three cost pools Overhead Rates Scheduling and travel 68 per hour Setup time per setup Supervision 15 $ e Textbook and Media Attempts: 1 of 5 used (a2) Determine the overhead cost assigned to each product line Commercial Residential Scheduling and travel $ Setup time $ $ Supervision $ Total cost assigned Save foc. Loter Attempts: 0 of 5 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above