Exercise 4-10 (Video) 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 selling costs to its product lines. Selling costs have traditionally been assigned to Kragan's product lines at a rate of 0 of direct materials costs. Its direct materials costs for the month of March for Kragan's "high-intensity line of athletic wear are $392,000. The company has decided to extend activity-based costing to sing costs Data relating to the "high-intensity line of products for the month of March are as follows Number of Cost Drivers Used per Activity 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 maled Catalog orders Dollar sales Overhead Rate 30.05 per dollar sales $300 per minute $10 per con inch $2.50 per catalog $1 per catalog order $0.03 per dollar sales 2,200 62,500 3900.000 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 Traditional product costing Activity-based costing Selling cost to be assigned LINK TO TEXT LINK TO TEXT LINK TO TEXT By what amount does the traditional product costing system undercut or overcost the high-intensity product line