Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PRINTER VERSION BACK NEXT Exercise 4-10 (Video) Kragan Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales

image text in transcribed
PRINTER VERSION BACK NEXT 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 $407,000. 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. 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 per 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 $941,000 260 2,200 63,600 8,750 $941,000 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 questiont Open Show. Work 30 800 & w

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Software Quality Assurance Internal Audit And IT Audit Integrated Testing Security And Audit

Authors: Abu Sayed Mahfuz

1st Edition

0367567970, 978-0367567972

More Books

Students also viewed these Accounting questions

Question

what is computer keyboard

Answered: 1 week ago

Question

Determine miller indices of plane A Z a/2 X a/2 a/2 Y

Answered: 1 week ago

Question

6. How do histories influence the process of identity formation?

Answered: 1 week ago