Required: Choose two activities or accounts from each of the four classifications and explain why you agree or disagree with the ABC project team's classification Exercise 5-35 Sang Costs LOS 2.54 Redwood Company sell craft Kits and supplies to retail outlets and through its c ling Some of the items are manufactured by Redwood, while others are purchased for For the p ast tures, the company currently hases is ing prices os produtos em that for direct material direct laber, and the associated whe n the past weed incus substantial selling costs, and Roger Jackson, controller, has sugested that these digo should be included in the product pricing structure Robert Adams und Ray Cameried Technologies Activity Based coming Is a C E SABCI 4. In the le, we have the n ame of Te o c c h www.downloadslide.net Chapter 5 Activity-Based Costing and Management After studying the costs incurred over the past two years for one of its products, skins of knitting yam. Jackson las elected four calories of selling costs and chosen cost drivers for each of these cod The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales como Catalogs Cost of catalogue Cedit and collection Totalsing costs Amount $ 675.000 295.400 105.000 60,000 Cost Driver Bows of yarn sold to restore Catalog u e Sensor Number of orders $1,135.400 The Knitting yarn is sold to retail outlets in hones, each containing 12 skins of yarn. The sale of partial boxes is not permitted. Commissions are paid ce sales to retail outlets but not on catalog sales The cost of catalog sales includes telephone costs and the wapes of personnel who take the catalog anders. Jackson believes that the selling costs vary significantly with the size of the order Onder sizes are divided into three categories as follows: Orders Smail Medium Catalog Sales 1-10 eins 11-20 Over 20 sen Retail Sales 1-10 11-20 Over 20 boxes An analysis of the previous year's records produced the following statistics Small talenbos 12 ss pero 5000 275.00 000 2000 2495 211.300 175.000 100 00 Cat . 0 Required 1. Prepare a schedule showing Redwood Company's total selling cost for each oder sie and the per sin go within each andere 2 Explain how the analysis of the selling costs for skins of knitting yarn is likely to impact future pricing and product decisions at Redwood Company CM