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.Question $2$ ?of $3$

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Question 2 of 3 -/5 123 ||| 000 Sunland Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Sunland 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 Sunland's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Sunland's "high-intensity" line of athletic wear are $401,000. 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 $926,000 270 Advertising-Internet Column inches $10 per column inch 2,200 Catalogs Catalogs mailed $2.50 per catalog 59,600 Cost of catalog sales Catalog orders $1 per catalog order 8,550 Credit and collection Dollar sales $0.03 per dollar sales $926,000 Question 2 of 3 -/5 123 ||| 000 Sunland Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Sunland 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 Sunland's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Sunland's "high-intensity" line of athletic wear are $401,000. 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 $926,000 270 Advertising-Internet Column inches $10 per column inch 2,200 Catalogs Catalogs mailed $2.50 per catalog 59,600 Cost of catalog sales Catalog orders $1 per catalog order 8,550 Credit and collection Dollar sales $0.03 per dollar sales $926,000

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To compute the selling costs to be assigned to the highintensity line of athletic wear for the month of March we will calculate the costs using both t... View the full answer