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Exercise 4-14 (Part Level submission) Venus 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. Residential Commercial $481,000 Revenues $298,000 $50,500 Direct materials costs $30,400 312,500 Direct labor costs 112,700 81,200 224,300 150,000 513,000 Overhead costs $73,700 $(32,000) Operating income (loss) 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 Activity Cost Pools Cost Drivers Overhead Scheduling and travel $94,000 Hours of travel 64,200 Number of setups Setup time Supervision 73,000 Direct labor cost Expected Use of Cost Drivers per Product Commercial Residential Scheduling and travel 780 530 Setup time 450 200