From TMeeks01:
This bit of ancient animation history was programmed in GW-Basic on a Mindset Computer.
The “live” sets included full size props, such as the typewriter and schoolroom desk, and doll house furniture, such as the paintings and the easel.
Overlays were accomplished by partially drawing the figures, rather than chromakeying the live shot, cutting away part of the character around a prop that was to be in the foreground.
(via r/ObscureMedia)