Question

Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The follo
The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not mo
Compute the activity-based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal
Determine the overhead cost assigned to each product line. Commercial Residential Scheduling and travel $ Setup time Supervis   
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Answer #1

Overhead Rates :-

Scheduling and travel = $97,500/1500= $65 per hour of travel

Setup time = $110500/650= $170 per setup

Supervision = $60000/($140000+$260000)= 0.15 of labour cost

Commercial Residential   

Scheduling and travel $52000 ($65*800 hours) $ 45500 ($65*700 hours)

Setup time $68000 ($170* 400 setup) $ 42500 ($170*250 setup)

Supervision $21000 ($0.15*$140000) $39000 ($0.15*$260000)

Total cost assigned $141000 $ 127000

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