Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The...

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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 $342,000 $477,000 Direct materials costs $35,000 $50,000 Direct labor costs 120,000 290,000 Overhead costs 102,000 257,000 172,000 502,000 Operating income (loss) $85,000 $(25,000) 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 Cost Drivers $102,000 Hours of travel Setup time 112,000 Number of setups Supervision 60,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 800 Setup time 450 250 Compute the activity-based overhead rates for each of the three cost pools. Overhead Rates Scheduling and travel $ per hour Setup time Supervision eTextbook and Medla $ Determine the overhead cost assigned to each product line. per setup Commercial Scheduling and travel $ $ Setup time $ $ Supervision $ $ Total cost assigned $ $ Residential 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 $342,000 $477,000 Direct materials costs $35,000 $50,000 Direct labor costs 120,000 290,000 Overhead costs 102,000 257,000 172,000 502,000 Operating income (loss) $85,000 $(25,000) 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 Cost Drivers $102,000 Hours of travel Setup time 112,000 Number of setups Supervision 60,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 800 Setup time 450 250 Compute the activity-based overhead rates for each of the three cost pools. Overhead Rates Scheduling and travel $ per hour Setup time Supervision eTextbook and Medla $ Determine the overhead cost assigned to each product line. per setup Commercial Scheduling and travel $ $ Setup time $ $ Supervision $ $ Total cost assigned $ $ Residential

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ActivityBased Overhead Rates 1 Calculate ActivityBased Overhead Rates We need to divide the estimated overhead cost for each pool by its corresponding ... View the full answer