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need anwser to b, will leave a like for correct anwser thanks! Concord Creations sells window treatments (shades, blinds, and awnings) to both commercial and
need anwser to b, will leave a like for correct anwser thanks!
Concord 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 $375,000 $516,000 Direct materials costs $35,000 $50,000 Direct labor costs 140,000 260,000 Overhead costs 91.500 266,500 251,000 561,000 rating income (loss) $108,500 $(45,000) 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 Activity Cost Pools Cost Drivers The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more table 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 develope Estimated Overhead Activity Cost Pools Cost Drivers Scheduling and travel Hours of travel Setup time Number of setups Supervision Direct labor cost $91,500 91,000 160,000 Estimated Use of Cost Drivers per Product Commercial 800 450 Scheduling and travel Setup time Residential 700 250 Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 0.38.) Overhead Rates Scheduling and travel $ 61 per hour Setup time per setup Supervision per dollar 130 40 Determine the overhead cost assigned to each product line. Commercial Scheduling and travel $ $ Setup time $ Supervision. $ Total cost assigned $ $ $ 48800 58500 56000 163300 Residential 42700 32500 104000 179200 Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial $ Residential $ Step by Step Solution
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