E4-14

bling the activity cost pool would be Designing products. her M. d blinds, information relates to its batch-level dow The E4-1 al and residential customers. year operations for the com Residential $480 $300,000 50,000 300,000 150,000 215,000 100,000 Direct materials costs (S 20 85,000 Direct labor costs Operating income (loss) about the resident product The controller, Peggy is conce given the i the resid why is not pr customers. In addition, are window coverings are less complex for residential so travel costs mity to company a result, has client base per in visit for resi denti customers. As lines to determi ive on a close ial p three acti roduct a closer look at the overhead costs assigned to the are the a more accurate product costing model can be developed. Here pools and related information she developed Cost Drivers Estimated overhead Activity Cost Pools Hours of travel $85,000 Scheduling and travel Number of setups 90,000 Direct labor cost Setup time 60,000 Supervision Expected Use of Cost Drivers per Product Commercial Residential 500 750 Scheduling and travel 250 350 Setup time Instructions (a) Compute the activity-based overhead rates for each of the three cost pools, and d mine the overhead cost assigned to each product line. (b) Compute the operating income for each product line, using the activity-based rates. (c) What do you believe Peggy Kingman should do? 4-15 snap Prints Company is a small printing and copying firm with three high offset printing presses, five copiers (two color and thma ne cutting and