Problem 3 In addition to product costs, Redwood Company incurs substantial selling costs, and Roger Jackson, controller, has suggested that these selling costs should be included in the product pricing structure. After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Amount POR Cost Driver Sales commissions $675,000 $3.00/box Boxes of yarn sold to retail stores Catalogs 295,400 .50/catalog| Catalogs distributed Cost of catalog sales 105,000 60/skein Skeins sold through catalog Credit and collection 60.000 10.00/order Number of retail