Eivity-Based Costing Using the activity cost pools identified in E18-6, classify each of those cost pools as either Instructions unit-level, batch-level, product-level, or facility-level. E18-13 William Mendel & Sons, Inc. is a small manufacturing company in La Jolla that s activity-based costing. Mendel &Sons accumulates overhead in the following activity es by level. uses cost pools. 6. Setting up equipment. 7. Training employees. 8. Inspecting machined parts. 9. Machining. 10. Assembling 1. Hiring personnel. 2. Managing parts inventory 3. Purchasing. 4. Testing prototypes. 5. Designing products. Instructions For each activity cost pool, indicate whether the activity cost pool would be unit-level, facility-level. batch-level, product-level, or E18-14 Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted using ng and ABC. operations for the current year. Commercial Residential Revenues $300,000 $480,000 Direct materials costs Direct labor costs Overhead costs $ 30,000 100,000 85,000 $ 50,000 300,000 150,000 215,000 500,000 Operating income (loss) $ 85,000 ($ 20,000) The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more 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 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: profitable given that the installations of on a per client visit for residential customers. As a result, she has decided to take Activity Cost Pools Scheduling and travel Setup time Supervision Estimated Overhead Cost Drivers $85,000 90,000 60,000 Hours of travel Number of setups Direct labor cost Expected Use of Cost Drivers per Product Commercial Residential Scheduling and travel Setup time 750 500 350 250 Instructions (a) Compute the activity-based overhead rates for each of the three cost pools, and deter- mine the overhead cost assigned to each product line. (b) Compute the operating income for each product line, using the activity-based over head rates. (c) What do you believe Peggy Kingman should do? pools. E18-15 Snap Prints Company is a small printing and copying firm with three high- collator, one cutting and folding machine, and one fax machine. To improve its pricing ally, Terry employs five employees: two printers/designers, one receptionist/bookkeeper speed offset printing presses, five copiers (two color and three black-and-white), one practices, owner-manager Terry Morton is installing activity-based costing, Addition- salesperson/copy-machine operator, and one janitor/delivery clerk. Terry can operate one