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. Residential $519,000 Revenues Direct materials costs Direct labor costs Overhead costs Commercial $355,500 $30,000 140,000 100,500 270,500 $85,000 $50,000 260,000 239,000 549,000 $(30,000) Operating income (loss) 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 Activity Cost Pools Scheduling and travel Setup time Supervision $100,500 119,000 120,000 Hours of travel Number of setups Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 750 750 Setup time 450 250 Compute the activity-based overhead rates for each of the three cost pools. (Round overhe places, e.g. 0.38.) Overhead Rates Scheduling and travel $ per hour Setup time $ per setup Supervision $ per dollar e Textbook and Media Determine the overhead cost assigned to each product line. Commercial Residential Scheduling and travel $ $ Setup time $ $ Supervision $ $ Total cost assigned $ $ Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial $ Residential