Question 7 of 7 1.6/8 E Crane 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 $ 300,000 $ 480,000 Direct material costs $ 30,000 $ 50,000 Direct labor costs 100,000 300,000 Overhead costs 85.000 215.000 151,200 501.200 Operating income (less) $85.000 $121,200 The controller, Pessy 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 dient 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 $ 100.200 Hours of travel Setup time 72.000 Number of setups Supervision 64,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 1.000 hours 670 hours Setup time 350 setups 250 setups Question 7 of 7