CM Corp. produces equal numbers of two products, A and B, each year. The firm is considering an ABC system to replace its current volume-based allocation system that uses units as the only cost driver. Analysis shows that half of the overhead costs are batch-level costs such as machine set-up costs and shipment set-up costs. These batch-level costs will be allocated using the number of batches under ABC. The average batch size for product B is twice as that of the batch size for product A.

Comparing costs under the ABC and the traditional system, which of the following statements is true? Here an "increase" means that reported cost under ABC > reported cost under the traditional system.

Group of answer choices

Cost per unit of product A would have increased, cost per unit of product B would have decreased, and total costs would have increased.

Cost per unit of product A would have increased, cost per unit of product B would have decreased, and there is no change in total costs.

Cost per unit of product A would have decreased, cost per unit of product B would have increased, and total costs would have increased.

Cost per unit of product A would have decreased, cost per unit of product B would have increased, and there is no change in total costs.