Shady Lady sells window coverings to both commercial and residential customers. The following information relates to its budgeted operations for the current year: Revenues Commercial $300,000 Residential $480,000 Direct material costs $30,000 $70,000 Direct labour costs 100,000 300,000 Overhead costs 55,000 Operating income (loss) 185,000 $115,000 162,000 532,000 $(52,000) The controller, Susan Chan, is concerned about the residential product line. She cannot understand why this line is not more profitable given that window coverings are less complex to install for residential customers. In addition, the residential client base resides close 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. Following are the three activity cost pools and related information she developed: Cost Drivers Hours of travel Activity Cost Pools Estimated Overhead Scheduling and travel $89,320 Set-up time 66,000 Number of set-ups Supervision 61,680 Direct labour cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 900 640 Set-up time 350 200