Zodiac Model Rocketry Company sells model rocketry kits and supplies to retail outlets and through its catalog. Some of the items are manufactured by Zodiac, while 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, Zodiac incurs substantial selling costs, and Jack Maxey, 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, rocket motors, Maxey 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: Cost Category Sales commissions $864,000 Boxes of rocket motors sold to retail stores Catalogs Costs of catalog sales 114,000 Rocket motors sold through catalogs Credit and collection Amount Cost Driver 385,850 Catalogs distributed 82,500 Number of retail orders Total selling costs $1,446,350 The rocket motors are sold to retail outlets in boxes, each containing 12 motors. 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. Maxey believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Order Size Catalog Sales Small Mediumm Large Retail Sales 1-10 rocket motors 1-10 boxes of motors 11-20 rocket motors11-20 boxes of motors Over 20 rocket motors Over 20 boxes of motors An analysis of the previous year's records produced the following statistics. Order Size Small Medium Large Total Retail sales in boxes (12 motors per box) 4,500 52,500 183,000 240,000 84,000 57,000 49,000 190,000 535 2,665 4,300 7,500 319,370 100.500 771.700 Catalog sales in units (i.e., motors) Number of retail orders Catalogs distributed 351,830 319,370