Sheridan sells window coverings 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 $ 70,000 Direct labour costs 100,000 300,000 Overhead costs 55,000 185,000 162,000 532,000 Operating income (loss) $ 115,000 $(52,000) The controller, Maria Miller, 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: Activity Cost Pools Estimated Overhead Cost Drivers Scheduling and travel $ 93,520 Hours of travel Set-up time 79,360 Number of set-ups Supervision 44,120 Direct labour cost Use of Cost Drivers per Product Commercial Residential Scheduling and travel 990 680 Set-up time 400 240 (a) Calculate the activity-based overhead rates for each of the three cost pools, and determine the overhead cost assigned to each product line. (Round overhead rate for supervision to 2 decimal places, e.g. 15.25% and other answers to 0 decimal places, e.g. 25,000.) places, e.g. 25,000.) Overhead rates Scheduling and travel $ per travel hour Set-up time $ per set-up Supervision % of direct labour cost Commercial Residential Total overhead costs applied $ $ e Textbook and Media Save for Later Attempts: unlimited Submit