al B. Assign the manufacturing overhead costs for Aprilie Wup c. Write a memorandum to the president of Air United explaining the benefits of activity-based costing. E17.10 (LO 1, 2, 3), AP Kragan Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Kragan has for years used activity- based costing in its manufacturing activities, it has always used traditional costing in assigning its sell- ing costs to its product lines. Selling costs have traditionally been assigned to Kragan's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Kragan's "high-intensity" line of athletic wear are $400,000. The company has decided to extend activity-based costing to its selling costs. Data relating to the "high-intensity" line of products for the month of March are as follows per Activity Cost Pools Sales commissions Advertising--TV Advertising-Internet Catalogs Cost of catalog sales Credit and collection Cost Drivers Dollar sales Minutes Column inches Catalogs mailed Catalog orders Dollar sales Overhead Rate $0.05 dollar sales $300 per minute $10 per column inch $2.50 per catalog $1 per catalog order $0.03 per dollar sales Number of Cost Drivers Used per Activity $900,000 250 2,000 60,000 9,000 900,000 Instructions a. Compute the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March (1) using the traditional product costing system (direct materials cost is the cost driver), and (2) using activity-based costing. b. By what amount does the traditional product costing system undercost or overcost the "high-intensity" product line relative to costing under ABC? es as E17.11 (LO 1, 2, 3), AP Health 'R Us, Inc., uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products. To meet Food and Drug Administration require- ments and to assure its customers of safe, sanitary, and nutritious food, Health 'R Us engages in a high level of quality control. Health 'R Us assigns its quality control overhead costs to all of 17% of direct labor costs. Its direct labor cost for the me $70,000. In response