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 $298,800 $475,000 Revenues Direct materials costs Direct labor costs Overhead costs $30,000 118,300 $50,000 312,500 94,100 242,400 150,000 512,500 $(37,500) Operating income (loss) $56,400 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 Activity Cost Pools Cost Drivers Scheduling and travel Setup time Supervision 98,000 Hours of travel 88,100 Number of setups 58,000 Direct labor cost Expected Use of Cost Drivers per Product Commercial Residential 950 Scheduling and travel Setup time 530 430 250