Question 6 of 12 -/1 current Attempt in Progress 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 $394,000. 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 Activity Cost Pools Cost Drivers Rate Used per Activity Sales commissions Dollar sales $0.05 per dollar sales $905,000 Advertising-TV Minutes $300 per minute 220 Advertising Internet Column inches $10 per column inch 1,900 Catalogs Catalogs malled $2.50 per catalog 59.800 Cost of catalog sales Catalog orders $1 per catalog order 8.750 Credit and collection Dollar sales $0.03 per dollar sales $905,000 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 5 $ e Textbook and Media de % 5 3 6 7 8 9 V E R U 0 CUBEUTEL Credit and collection GOOD Dollar sales PETERDE ET $0.03 per dollar sales $905,000 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 eTextbook and Media By what amount does the traditional product costing system undercost or overcost the high-intensity product line? $ e Textbook and Media Save for Liter Attempts: 0 of 3 used O DE % 5 3 6 7 8. W E R T Y C