Exercise 4-14 a1-a2, b (Video) 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. Commercial Revenues $275,000 Residential $484,000 Direct materials costs $40,000 $50,000 Direct labor costs Overhead costs 100,000 75,000 300,000 Operating income (loss) 215,000 164,000 $60,000 $14,000 $(30,000) 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 Scheduling and travel Setup time Supervision Estimated Overhead Cost Drivers $75,000 Hours of travel 104,000 Number of setups 60,000 Direct labor cost Estimated Use of Cost Drivers per Product Scheduling and travel Setup time Commercial Residential 750 500 400 250 Compute the activity-based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal places, e.g. 0.38.) Overhead Rates Scheduling and travel Setup time Supervision LINK TO TEXT per dollar $ per setup per dollar VIDEO: SIMILAR EXERCISE