Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted opefations for the current year. Commercial Residential $300,000 $480,000 Revenues Direct materials costs Direct labor costs $30,000 $50,000 100,000 300,000 85.000 Overhead costs 215,000 150,000 500,000 $85,000 $120,000 Operating income (loss) The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more 11 MacBook Pro Commercial Residential Revenues $300,000 $480,000 $30,000 100.000 Direct materials costs Direct labor costs Overhead costs Operating income (loss) $50,000 300,000 150,000 85,000 215,000 500,000 $(20.000) $85,000 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 Estimated Overhead Cost Drivers $85.000 Hours of travel Activity Cost Pools Scheduling and travel Setup time 90,000 Number of setups BY atv 11 Question 3 of 4 PARLOURE BICICLOS .../10 WIFWECCACC 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 Estimated Overhead $85.000 90,000 Cost Drivers Hours of travel Number of setups Direct labor cost Supervision 60,000 Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 750 500 Setup time 350 250 (c) Matado. Deshould do 10 g Question 3 of 4 Estimated USE OF COST Drivers per FTOLUCE Commercial Residential Scheduling and travel Setup time 750 500 350 250 (c) What do you believe Peggy Kingman should do? B 1 UT TIE 1 . 3 = 39 UL - ove e Textbook and Media Attempts: unlim eclne.pdf A stv 11