Answer:
1. $276,500
2. $328,950
Explanation:
1. Computation for the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using the traditional product costing system
Traditional product costing = $395,000 * 70%
Traditional product costing = $276,500
Therefore the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using the traditional product costing system is $276,500
2. Computation for the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using activity-based costing
Activity based costing :
Sales commissions ($940,000*$0.05) $47,000
Advertising - TV (230*$300) $69,000
Advertising - internet (2,000*$10) 20,000
Catalogs (62,400*$2.50) $156,000
Cost of catalog sales (8,750*$1) 8,750
Credit and collection ($940,000*$0.03) $28,200
Selling cost $328,950
Therefore the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using activity-based costing is $328,950
