Grant Company is considering the adoption of an activity-based costing (ABC) S that their traditional costing system distorts the product costs. This company pro ase for manuta and N501. Their traditional costing system uses direct labor cost as the allocatio he production managers decided that major activities are Machine setups, SP determined the costs for each activity. They also identified how many setups, MH5. )system because the managers suspect is company produces and sells only two products M407 base for manufacturing overhead cost. ne setups, Special Processing, and General factory and many setups, MHs, and DLHs each product requires General fa Product M407 N501 DU 0006 Price $150 $ 230 DM DLHs/unit $44.00 $72.00 Units 5,000 1,000 1 40 The wage rate per hour is The company collected the data for ABC as follows: 20.00 Cost Driver or ActivityEstimated Activity Cost Pool Machine setup Special processing General lactoryDirect-labor hours Measure # of, setups Machine hours 13,170 99 OH cost IT(1.) $46,200 55,000 37,500 $138,700 Total N501 120 12,000 Activity Measure M407 0 # of setups Machine hours 8,000 2 Relative to the traditional costing system, the product cost for N501: A. under the ABC system is higher by B. under the ABC system is lower by C. under the ABC system is higher by D under the ABC system is lower by E. None of the above S 83.81 per unit. 83.81 per unit S 34.89 per unit. 34.89 per unit 30300, 3 000