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				$306,800				$485,000
Direct materials costs		$40,000				$50,000
Direct labor costs		110,000				290,000
Overhead costs		86,800		236,800		165,000		505,000
Operating income (loss)				$70,000				$(20,000)

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			$86,800			Hours of travel
Setup time			105,000			Number of setups
Supervision			60,000			Direct labor cost

Estimated Use of Cost Drivers per Product
		Commercial				Residential
Scheduling and travel			750				650
Setup time			500				250

COMPUTE THE ACTIVITY BASED RATES FIOR EACH OF THE THREE COSTS AND ROUND ANSWERS 2 DECIMAL PLACES:

SCHEDULING AND TRAVEL:

SETUP TIME:

SUPERVISION:

DETERMINE THE OVERHEAD COST ASSIGNED TO EACH PRODUCT LINE:

SCHEDULING AND TRAVEL (COMMERCIAL AND RESIDENTIAL):

SETUP TIME (COMMERCIAL AND RESIDENTIAL):

SUPERVISION (COMMERCIAL AND RESIDENTIAL):

TOTAL COST ASSIGNED (COMMERCIAL AND RESIDENTIAL):

COMPUTE THE OPERATING INCOME FOR EACH PRODUCT LINE, USING THE ACTIVITY-BASED OVERHEAD RATES. (ROUND ANSWERS TO 0 DECIMAL PLACES, E.G. 1,575.)

COMMERICAL:

RESIDENTIAL: