Current Attempt in Progress 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. Residential Commercial $375,500 $546,000 $30,000 $50,000 Revenues Direct materials costs Direct labor costs Overhead costs 140,000 260,000 130,500 300.500 256,000 566,000 Operating income (loss) $75,000 $120,000) 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: Estimated Overhead $130,500 Activity Cost Pools Scheduling and travel Setup time Supervision Cost Drivers Hours of travel Number of setups Direct labor cost 96,000 160,000 Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 800 650 Setup time 550 250 (b) Your answer is incorrect. Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial Residential $