Question 7 of 12 0.67/2 E Current Attempt in Progress 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 $275,000 $40.000 Residential $484,000 Revenues $50,000 100,000 300,000 Direct materials costs Direct labor costs Overhead costs Operating income (loss) 75,000 215,000 164,000 514,000 $60,000 $(30,000) The controller Pesey 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 Estimated Overhead Cost Drivers Scheduling and travel $75,000 Hours of travel Question 7 of 12 0.67/2 Scheduling and travel $75,000 Hours of travel Setup time 104,000 Number of setups Supervision 60,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 500 750 Setup time 400 250 Your answer is correct Compute the activity-based overhead rates for each of the three cost pools. Overhead Rates Scheduling and travel $ 60 per hour Question 7 of 12 0.67/2 * Your answer is incorrect Determine the overhead cost assigned to each product line. Commercial Residential Scheduling and travel $ 750 $ 500 Setup time 400 $ 250 Supervision $ 100000 $ 300000 Total cost assigned $ 101150 $ 300750 e Textbook and Media X Your answer is incorrect. Compute the operating income for each product line, using the activity based overhead rates Operating income (loss) Commercial $ 56500 Residential $ 6500 e Textbook and Media