Redwood Company sells craft kits and supplies to retail outlets and through its catalog. Some of the items are

manufactured by Redwood, while others are purchased for resale. For the products it manufactures, the company

currently bases its selling prices on a product$-$costing system that accounts for direct material, direct labor, and the

associated overhead costs. In addition to these product costs, Redwood 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:

The knitting yarn is sold to retail outlets in boxes, each containing $12$ skeins of yarn. The sale of partial boxes is not

permitted. Commissions are paid on sales to retail outlets but not on catalog sales. The cost of catalog sales includes

telephone costs and the wages of personnel who take the catalog orders. Jackson believes that the selling costs vary

significantly with the size of the order. Order sizes are divided into three categories as follows:

An analysis of the previous year's records produced the following statistics.

Required:

Prepare a schedule showing Redwood Company's total selling cost for each order size and the per$-$skein selling cost

within each order size. $($Round your intermediate calculations and unit cost per order to $2$ decimal places.$)$

An analysis of selling costs shows: $($You may select more than one answer. Single click the box with the question

mark to produce a check mark for a correct answer and double click the box with the question mark to empty the

box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.$)$

Management may want to consider offering discounts for large orders.

Small orders are preferable to medium sized orders.

Large orders are preferable to medium sized orders.

Marketing should be focused on small sized orders.