Question $4$ of $10$

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:

Compute the activity$-$based overhead rates for each of the three cost pools. $($Round overhead rate for supervision to $2$ decimal places,

e$.$g$.0\mathrm{.}38.)$

Bonita Company manufactures two products, Regular and Supreme. Bonita's estimated overhead costs consist of machining,

$$2800000$; and assembling, $$1400000.$ Information on the estimated use of the cost driver by the two products is as follows:

Overhead applied to Supreme using traditional costing using direct labor hours is

$$1204000.$

$$2996000.$

$$1680000.$

$$2520000.$