Sunland 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 $375,500 $509,000 Direct materials costs $30,000 $50,000 Direct labor costs 140,000 260,000 Overhead costs 100,500 270,500 239,000 549,000 Operating income (loss) $105,000 $(40,000) 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: Activity Cost Pools Estimated Overhead Cost Drivers Scheduling and travel $100,500 Hours of travel Setup time 119,000 Number of setups Supervision 120,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential 750 750 Scheduling and travel Setup time 450 250 Your answer is correct. Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 0.38.) Overhead Rates Scheduling and travel $ 67 per hour Setup time $ 170 per setup Supervision $ .3 per dollar e Textbook and Media Solution Attempts: 3 of 3 used (a2) Your answer is correct. Determine the overhead cost assigned to each product line. Commercial Residential Scheduling and travel $ 50250 $ 50250 Setup time $ 76500 $ 42500 Supervision $ 42000 $ 78000 Total cost assigned $ 168750 $ 170750 Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial $ $ Residential $