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 70% of direct materials costs. Its direct materials costs for the month of March for Kragan's "high-intensity" line of athletic wear are $410,000. 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. Overhead Number of Cost Drivers Used per Activity Cost Drivers Rate Activity Cost Pools Dollar sales Sales commissions $0.05 per dollar sales $919,000 Advertising-TV $300 per minute Minutes 240 Advertising-Internet Catalogs Column inches 1,900 $10 per colu mn inch Catalogs mailed $2.50 per catalog 58,300 Cost of catalog sales $1 per catalog order Catalog orders 8,900 Credit and collection Dollar sales $0.03 per dollar sales $919,000 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 VIDEO: SIMILAR EXERCISE By what amount does the traditional product costing system undercost or overcost the "high-intensity" product line? click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE