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 $397,000. The company has decided to extend activity-based costing to its selling costs. Data relatingto the high-intensity line of products for the month of March are as follows. Cost Drivers Overhead Rate $0.05 per dollar sales Number of Cost Drivers Used per Activity Dollar sales $910,000 Activity Cost Pools Sales commissions Advertising --TV Advertising --Internet Minutes $300 per minute 280 Column inches $10 per column inch 2,200 $2.50 per catalog 58.100 Catalogs Cost of catalog sales Catalogs mailed Catalog orders $1 per catalog order 9,350 Credit and collection Dollar sales $0.03 per dollar sales $ 910,000 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 (2) By what amount does the traditional product costing system undercost or overcost the "high-intensity product line