Exercise 5-35 ABC; Selling Costs (LO 5-2, 5-4) Redwood Company sells craft kits and supplies to retail outlets and throu

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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, 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, 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:
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 significantly with the
size of the order. Order sizes are divided into three categories as
follows:
An analysis of the previous year’s records produced the following
statistics.
Required:
1. 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.)
2. An analysis of selling costs
shows: (You may select more than one answer. Single
click the box with the question mark to produce a check mark for a
correct answer and double click the box with the question mark to
empty the box for a wrong answer. Any boxes left with a question
mark will be automatically graded as incorrect.)

check all that apply