Inter Industries manufactures two products: A and B. A review of the company's accounting records revealed the following per-unit costs and production volumes:

	a	b
Production Volume (units)	2500	5000
Direct material	$40	$60
Direct labor	24
2 hours at $12		36
3 hours at $12
Manufacturing Overhead
2 hours at $93	186
3 hours at $93		279

Management is considering a shift to activity-based costing to improve the firm's accounting procedures, and the following data are available:

Cost Pool	Cost	Cost Driver	A	B	Total
Setups	$240,000	# of Setups	100	20	120
General Factory	$1,500,000	Direct Labor Hours	5,000	15,000	20,000
Machine Processing	$120,000	Machine Hours	2,200	800	3,000

Inter determines selling prices by adding 40% to a product's total cost.

E. Will the cost and selling price of product A likely increase or decrease if Inter changes to activity-based costing? Why? Hint: No calculations are necessary.