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	2,000	4	8,000
Product W7	440	3	1,320
Total direct labor-hours			9,320

The direct labor rate is $23.60 per DLH. The direct materials cost per unit is $148.50 for Product X0 and $130 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	$	276,078	8,000	1,320	9,320
Production orders	orders		19,348	540	740	1,280
Order size	MHs		241,614	4,040	4,140	8,180
		$	537,040

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 $219.37.

• The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $41.39.

• The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $41.39.

• The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $219.37.