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Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The follox Your answer is incorrect. Try again. Compute the operating income for each product line, using the activity-based overhead

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Answer #1
Income Statement
Particulars Commercial Residential
Revenues $ 356,500.00 $ 536,000.00
Less: Expenses:
Direct material cost $   35,000.00 $   50,000.00
Direct labor cost $ 140,000.00 $ 260,000.00
Overhead cost $ 163,300.00 $ 338,300.00 $ 179,200.00 $ 489,200.00
Operating Income $   18,200.00 $   46,800.00

Workings:

Drivers Cost
Cost Pools Estd. OH Volume per volume
Scheduling and travel $   91,500.00 1500 (800 + 700) $   61.00
Setup time $   91,000.00 700 (450 + 250) $ 130.00
Supervision $ 160,000.00 400000 ($ 140000 + $ 260000) $      0.40
Allocation of OH costs
Particulars Commercial Residential
Scheduling and travel $   48,800.00 ($ 61 x 800) $   42,700.00 ($ 61 x 700)
Setup time $   58,500.00 ($ 130 x 450) $   32,500.00 ($ 130 x 250)
Supervision $   56,000.00 (0.4 x $ 140000) $ 104,000.00 (0.4 x $ 260000)
$ 163,300.00 $ 179,200.00
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