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.

Commercial Residential

Revenues				$ 355,500				$ 519,000
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)				$ 85,000				$( 30,000)

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:

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

Scheduling and travel			750				750
Setup time			450				250

Compute the operating income for each product line, using the activity-based overhead rates.

Operating income (loss)

Commercial

Commercial	$
Residential	$

Residential