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(Solved): Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and reside ...
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. The controller. Pegsy Kingman, is concemed 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 dient base resides in dose proximity to the company office, so travel costs are not as expensive on a per dient 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:
Determine the overhead cost assigned to each product line.
Commercial Residential Scheduling and travel 72,000 58,500 Setup time 66,000 30,000 Supervision 56,000 104,000 Total cost assigned $194,000 $192,500 Working: Allocation of scheduling and travel costs = scheduling and travel cost * use of cost driver