Sheffield Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Sheffield 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 Sheffield's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Sheffield's "high-intensity" line of athletic wear are $399,000. The company has decided to extend activity-based costing to its selling costs (for internal decision-making only). Data relating to the "high-intensity" line of products for the month of March are as follows. Activity Cost Pools Sales commissions Advertising-TV Advertising-Internet Catalogs Cost of catalog sales Credit and collection (a) Cost Drivers Dollar sales Minutes Column inches Catalogs mailed Catalog orders Dollar sales Selling cost to be assigned Overhead Rate $0.05 per dollar sales $300 per minute $10 per column inch $2.50 $1 $0.03 $ per catalog per catalog order

per dollar sales Traditional product costing Number of Cost Drivers Used per Activity $ $916,000 270 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. 2,000 Activity-based costing 60,600 9,500 $916,000

Sheffield Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Sheffield 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 Sheffield's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Sheffield's "high-intensity" line of athletic wear are $399,000. The company has decided to extend activity-based costing to its selling costs (for internal decision-making only). Data relating to the "high-intensity" line of products for the month of March are as follows. Activity Cost Pools Cost Drivers Overhead Rate Number of Cost Drivers Used per Activity Sales commissions Dollar sales Advertising-TV Minutes $0.05 per dollar sales $300 per minute $916,000 270 Advertising-Internet Column inches $10 per column inch 2,000 Catalogs Catalogs mailed $2.50 per catalog 60,600 Cost of catalog sales Catalog orders Credit and collection Dollar sales $0.03 $1 per catalog order per dollar sales 9,500 $916,000 (a) 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 $ $