Eliezrie, Inc., manufactures and sells two products: Product G8 and Product O0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product G8	720	5.2	3,744
Product O0	320	2.2	704
Total direct labor-hours			4,448

The direct labor rate is $22.30 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product G8	$115.10
Product O0	$115.50

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated		Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost		Product G8	Product O0	Total
Labor-related	DLHs	$	56,555	3,744	704	4,448
Machine setups	setups		55,390	500	610	1,110
Order size	MHs		366,508	4,900	5,300	10,200
		$	478,453

Which of the following statements concerning the unit product cost of Product G8 is true? (Round your intermediate calculations to 2 decimal places.)

rev: 03_25_2018_QC_CS-119201

Multiple Choice

• The unit product cost of Product G8 under traditional costing is less than its unit product cost under activity-based costing by $214.09.

• The unit product cost of Product G8 under traditional costing is less than its unit product cost under activity-based costing by $334.17.

• The unit product cost of Product G8 under traditional costing is greater than its unit product cost under activity-based costing by $334.17.

• The unit product cost of Product G8 under traditional costing is greater than its unit product cost under activity-based costing by $214.09.

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