Vaughn Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Vaughn 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 Vaughn's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Vaughn's "high-intensity" line of athletic wear are $396,000. 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 $0.05 per dollar sales $925,000 Advertising-TV Minutes $300 per minute 260 Advertising-Internet Column inches $10 per column inch 2,000 Catalogs Catalogs mailed $2.50 per catalog 60,100 Cost of catalog sales Catalog orders $1 per catalog order 9,150 Credit and collection Dollar sales $0.03 per dollar sales $925,000 (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 Selling cost to be assigned $ Activity-based costing $ eTextbook and Media Save for Later Using multiple attempts will impact your score. 10% score reduction after attempt 2 Attempts: 0 of 3 used Submit Answer (b). By what amount does the traditional product costing system understate or overstate the "high-intensity" product line? $ eTextbook and Media Save for Later Using multiple attempts will impact your score. 10% score reduction after attempt 2 Attempts: 0 of 3 used Submit