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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	Amount			Cost Driver
Sales commissions	$	507,000		Boxes of rocket motors sold to retail stores
Catalogs		547,810		Catalogs distributed
Costs of catalog sales		124,800		Rocket motors sold through catalogs
Credit and collection		74,400		Number of retail orders
Total selling costs	$	1,254,010

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	Retail Sales
Small	110 rocket motors	110 boxes of motors
Medium	1120 rocket motors	1120 boxes of motors
Large	Over 20 rocket motors	Over 20 boxes of motors

An analysis of the previous years records produced the following statistics.

	Order Size
	Small	Medium	Large	Total
Retail sales in boxes (12 motors per box)	3,000	61,500	189,000	253,500
Catalog sales in units (i.e., motors)	90,000	63,000	55,000	208,000
Number of retail orders	595	2,965	5,740	9,300
Catalogs distributed	475,280	512,060	108,280	1,095,620

Required:

1.	Prepare a schedule showing Zodiac Model Rocketry Companys total selling cost for each order size and the per-rocket motor selling cost within each order size. (Round your intermediate calculationsand unit cost per order to 2 decimal places.)

2.	An analysis of selling costs shows (Select all that apply.)
	Management may want to consider offering discounts for large orders. Small orders are preferred to medium sized orders. Large orders are preferable to medium. Marketing should be focused on small sized orders.

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