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Exercise 5-35 ABC; Selling Costs (LO 5-2, 5-4) Redwood Company sells craft kits and supplies to retail outlets and through its catalog. Some of the items are manufactured by Redwood, whik 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: t Cost Category Sales comzssions Catalogs Cost of catalog sales Credit and cot lection Total selling costs hount $ gn, 425, 400 154, 400 51,631.600 Cost Driver Boxes of yarn sold to retail stores Catalogs distributed Skezns sold through catalog Number of retail orders 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 significantty with the size of the order. Order sizes are divided into three categories as follows: Order Size Snail Medium La rge Catalog Sales Ile skeins 1120 skeins Over skeins Retail Sales 110 boxes 1120 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics- Order Size Retail sales in boxes (12 skeins per box) Catalog sales in skeins Nunber of retail orders Catalogs distributed Required: Smalt s , ee 85, ee sas 363 .ez Medium 54, ee 58, e 2, 715 333,270 Large 184. ee s,e 4,540 154,520 total 243. eee 193. eee 7.8ee 850 , see I. 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.) REDWOOD COMPANY Of Selling Costs By Order Size and Per Skein mthin Each Order Size Order sue Lyge Sales comrrssions Catalogs Cost ot catalog sales Creet and collecticgt rotal cost for all orders of a given sue units (skeins) sold unit cost per order ot a given size