Waterway 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 $355,050 $425,000 Direct materials costs $30,000 $50,000 Direct labor costs 150,000 250,000 Overhead costs 85,050 265,050 145,000 445,000 Operating income (loss) $90,000 $(20,000) 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 Estimated Overhead $85,050 Cost Drivers Hours of travel Setup time 105,000 Number of setups Supervision 40,000 Direct labor cost upervision 40,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 800 550 Setup time 500 250 Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 0.38.) Overhead Rates Scheduling and travel $ per hour Setup time Supervision eTextbook and Media per setup. per dollar Determine the overhead cost assigned to each product line. Commercial Scheduling and travel Setup time Supervision Total cost assigned eTextbook and Media Residential Compute the operating income for each product line, using the activity-based overhead rates. Commercial $ Operating income (loss) Residential $ eTextbook and Media