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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

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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 $402,000. 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 Rate Activity Cost Pools Sales commissions Cost Drivers Dollar sales Number of Cost Drivers Used per Activity $916,000 $0.05 per dollar sales Advertising-TV Minutes $300 per minute 210 Column inches $10 per column inch 2.200 Catalogs mailed $2.50 per catalog 63,300 Advertising - Internet Catalogs Cost of catalog sales Credit and collection Catalog orders 8,650 $1 per catalog order $0.03 per dollar sales Dollar sales $916,000 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 $ $

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