A newly-hired McCombs MPA reviews the ABC costing system and concludes that it should also include a facility-level cost pool. She estimates that the facility-level pool should include $40,000 of MOH, with a cost driver of number of cases produced. Since total MOH is unchanged, the $40,000 in the new pool comes from reclassifying costs out of the existing cost pools, as follows: Activity Cost Pool Pool Cost Reduction Purchasing and receiving $ 20,000 Setup for production $ - Blending and fermenting $ 15,000 Quality control $ 5,000

Circle the one of the following that describes the effect of this design change on the reported profit per case of beer HI, and explain your answer briefly below (note that this can be determined without reworking the whole ABC problem, and you are not required to show any calculations).

Profit per case of HI will increase.

Profit per case of HI will decrease.

Profit per case of HI will be unchanged.

We cannot tell what will happen to profit per case of HI from the information given. Explain your answer briefly: