Hased Costing ACC560 Week 3 Homework: Chapter 4: Activite-Based Costing E4-14 Venus Creations s sells windonw treatmerts (shades, bilnds, and aumis and residential customers. The folleong information ve current ycar 1 to both d Revenues Consmereial Residential $480,000 Direct labor costs Overhead costs Operating income (loss) $ 30,000 $ 50,000 300,000 500,000 5 20000) 83,000 215,000 85000 cannot understand why this line is not mone prohta window coverings are I client base resides in clo gman, is concerned about the residential product line. She ble given that the installations of e les complex for residential customers. In addition, the residential se proximity to the company office, so travel costs are not as a closer lookat visit for residential customers. As a result, she has decided to take a more accurate product costing model can pools and related information she developed ive on a per client vi ne overhead costs assigned to the two product lines to determine whether he developed. Here are the three activity cost look dost Drivers Hours of travel Estimated Overhead Activity Cost Pools Scheduling and travel Sctup time Supervision $85,000 90,000 Number of setups Direct labor cost Expected Use of Cost Drivers per Produet Commercial Residential Scheduling and travel Sctup time 500 250 350 (a) Compute the activity-based overhead rates for each of the three cost pools, and deter- (b) Com Instructions mine the overhead cost assigned to each product line. pute the operating income for each product line, using the activity-based over head rates (c) What do you believe Peggy Kingman should do