Ch17 Q10 b

Answer b and Show work please thanks

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 $185.000 120,000 102.000 257,000 $85,000 Residential $477.000 $50,000 280,000 172,000 502.000 $125.000) 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 Gost 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 da 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 160 per setup Supervision 15 e Textbook and Media Attempts: 1 of 5 used (a2) Your answer is correct Determine the overhead cost assigned to each product line Commercial Residential Scheduling and travel $ 47800 54400 $ 72000 Setup time 40000 E Supervision $ 18000 VA 42000 $ Total cost assigned 137600 $ 136400 (b) Compute the operating income for each product line using the activity-based overhead rates. Operating income (loss) Commercial $ Residential $