Redwood Company sells craft kits and supplies to retail outlets and through its catalog. Some of the items are m. Redwood, while others are purchased for resale. For the products it manufactures, the company currently bases product-costing system that accounts for direct material, direct labor, and the associated overhead costs. In addit costs, Redwood incurs substantial selling costs, and Roger Jackson, controller, has suggested that these selling ce 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 categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the cost drivers are as follows: Cost Category Sales commissions Catalogs Cost of catalog sales Credit and collection Total selling costs Amount Cost Driver $751,500 Boxes of yarn sold to retail stores 430,400 Catalogs distributed 123,000 Skeins sold through catalog 99,000 Number of retail orders 51,403,900 The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permit Commissions are paid on sales to retail outlets but not on catalog sales. The cost of catalog sales includes telephone costs wages of personnel who take the catalog orders Jackson believes that the selling costs vary significantly with the size of tra Order sites are divided into three categories as follows Redwood Company sells craft kits and supplies to retail outlets and through its catalog. Some of the items are m. Redwood, while others are purchased for resale. For the products it manufactures, the company currently bases product-costing system that accounts for direct material, direct labor, and the associated overhead costs. In addit costs, Redwood incurs substantial selling costs, and Roger Jackson, controller, has suggested that these selling ce 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 categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the cost drivers are as follows: Cost Category Sales commissions Catalogs Cost of catalog sales Credit and collection Total selling costs Amount Cost Driver $751,500 Boxes of yarn sold to retail stores 430,400 Catalogs distributed 123,000 Skeins sold through catalog 99,000 Number of retail orders 51,403,900 The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permit Commissions are paid on sales to retail outlets but not on catalog sales. The cost of catalog sales includes telephone costs wages of personnel who take the catalog orders Jackson believes that the selling costs vary significantly with the size of tra Order sites are divided into three categories as follows
