-/3 Carla Vista Clothing Company manufactures its own designed and labelled sports attire and sells its...

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-/3 Carla Vista Clothing Company manufactures its own designed and labelled sports attire and sells its products through catalogue sales and retail outlets. While Carla Vista has used activity-based costing in its manufacturing activities for years, it has always used traditional costing in assigning its selling costs to its product lines. Selling costs have traditionally been assigned to Carla Vista's product lines at a rate of 80% of direct materials costs. Its direct materials costs for the month of March for Carla Vista's "high- intensity" line of attire are $400,000. The company has decided to extend activity-based costing to its selling costs (for internal decision-making only). Data relating to the high-intensity line of products for the month of March are as follows: Number of Cost Drivers Used Activity Cost Pools Sales commissions Advertising-TV/Radio Advertising-Newspaper Cost Drivers Overhead Rate per Activity Dollar sales $0.06 per dollar sales $942,100 Minutes $290.00 per minute 250 Column inches $5.00 per column inch 1,780 Catalogues Catalogues mailed $2.50 per catalogue 5,890 Cost of catalogue sales Catalogue orders $1.00 per catalogue order 8,500 Credit and collection Dollar sales $0.04 per dollar sales $942,100 -/3 Carla Vista Clothing Company manufactures its own designed and labelled sports attire and sells its products through catalogue sales and retail outlets. While Carla Vista has used activity-based costing in its manufacturing activities for years, it has always used traditional costing in assigning its selling costs to its product lines. Selling costs have traditionally been assigned to Carla Vista's product lines at a rate of 80% of direct materials costs. Its direct materials costs for the month of March for Carla Vista's "high- intensity" line of attire are $400,000. The company has decided to extend activity-based costing to its selling costs (for internal decision-making only). Data relating to the high-intensity line of products for the month of March are as follows: Number of Cost Drivers Used Activity Cost Pools Sales commissions Advertising-TV/Radio Advertising-Newspaper Cost Drivers Overhead Rate per Activity Dollar sales $0.06 per dollar sales $942,100 Minutes $290.00 per minute 250 Column inches $5.00 per column inch 1,780 Catalogues Catalogues mailed $2.50 per catalogue 5,890 Cost of catalogue sales Catalogue orders $1.00 per catalogue order 8,500 Credit and collection Dollar sales $0.04 per dollar sales $942,100