I do not know how to start this problem. Please help! Venus Creations sells wind

Question

I do not know how to start this problem. Please help!

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, Peggy 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: Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 12.25.)

Explanation / Answer

Scheduling and travel = 94,000/1,310= $71.76 Set up time = 64,200 / 650(total setup time) = $98.77 Supervistion = 73,000/425,200(total direct labor cost) =17.17%

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