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. Revenues Direct materials costs Direct labor costs Overhead costs Operating income (loss) Commercial $342,000 $35,000 120,000 102,000 257,000 $85,000 Residential $477,000 $50,000 280,000 172,000 502,000 $125,000) 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 Scheduling and travel Setup time Supervision Estimated Overhead $102,000 112,000 60,000 Cost Drivers Hours of travel Number of setups Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 800 Setup time 450 250 (21) Compute the activity-based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal places, e.g. 0.38.) Overhead Rates Scheduling and travel $ per dollar Setup time $ per setup Supervision per dollar (a2) Determine the overhead cost assigned to each product line. Commercial Residential Scheduling and travel $ Setup time $ $ Supervision $ $ Total cost assigned $ $ (b) Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial $ Residential