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		302,600		418,000
Direct material costs	30,900		50,500
Direct labor costs	104,900		312,500
Overhead costs	82,600	218,400	150,000	513,000
Operating income(loss)		84,200		$(32,000)

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 and related information she developed

Activity Costs Pools	estimated overhead	Cost drivers
Schedule and travel	90,500	Hours to travel
Setup time	78,600	Numbers of setup
Supervision	63,500	Direct labor costs

Expected use of cost of drivers per product

	Commercial	Residential
Scheduling and travel	750	600
Setup time	360	290

Compute the activity based overhead rates for each of the three cost pools

Over head rates

	Overhead rates
scheduling and travel	$
Setup time	$
Supervision	$

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	$