1. 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	4	4,000
   Product W7	490	3	1,470
   Total direct labor-hours			5,470

   The direct labor rate is $28.60 per DLH. The direct materials cost per unit is $153.50 for Product X0 and $135 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	$	281,078	4,000	1,470	5,470
   Production orders	orders		19,848	590	790	1,380
   Order size	MHs		247,094	4,090	4,190	8,280
   		$	548,020

   Which of the following statements concerning the unit product cost of Product W7 is true? (Round your intermediate calculations to 2 decimal places.)

   	A.	The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $131.95.
   	B.	The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $45.49.
   	C.	The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $131.95.
   	D.	The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $45.49