Faz, Inc., manufactures and sells two products: Product X0 and Product W7. 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 X0	1,000	6	6,000
Product W7	590	3	1,770
Total direct labor-hours			7,770

The direct labor rate is $38.60 per DLH. The direct materials cost per unit is $163.50 for Product X0 and $145 for Product W7.

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 X0	Product W7	Total
Labor-related	DLHs	$	291,078	6,000	1,770	7,770
Production orders	orders		20,848	690	890	1,580
Order size	MHs		258,314	4,190	4,290	8,480
		$	570,240

Which of the following statements concerning the unit product cost of Product W7 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 W7 under traditional costing is greater than its unit product cost under activity-based costing by $133.59.

• The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $53.62.

• The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $53.62.

• The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $133.59.