Lily 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 Residential Revenues $359,500 $464,000 Direct materials costs $45,000 $50,000 Direct labor costs 140,000 260,000 Overhead costs 94,500 279,500 184,000 494,000 Operating income (loss) $80,000 $(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 Estimated Overhead Cost Drivers Scheduling and travel $94,500 Hours of travel Setup time 84,000 Number of setups Supervision 100,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 800 Setup time 350 250 Your answer is partially correct. Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 0.38.) Scheduling and travel Setup time Supervision GA A eTextbook and Media Overhead Rates 63 per hour 120 per setup 1.05 per dollar Your answer is incorrect. Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial Residential eTextbook and Media (80000) 30000 Your answer is partially correct. Determine the overhead cost assigned to each product line. Scheduling and travel Setup time Supervision Total cost assigned SA eTextbook and Media Commercial 44100 42000 147000 233100 1A $ +A (A Residential 50400 30000 273000 353400