Jackson Company makes and sells 2 products: Product A and Product B. The company currently uses traditional costing and applies overhead on the basis of direct labor hours (DLHs). Each product requires 2 direct labor hours per unit. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

			Expected Activity
Activity Cost Pools	Activity Measures	Estimated Overhead Cost	Product A	Product B	Total
Machining	MHs	$372,512	3,000	6,000	9,000
Machine setups	setups	41,670	100	300	400
Inspections	Inspections	404,504	25	100	125
		$818,686

Will the unit product costs change if this company adopts ABC?

a. Yes. ABC will assign more cost to Product B and less cost to Product A.

b. No. Both traditional costing and ABC would assign equal amounts of overhead to each product.

c. No. Both products require 2 direct labor hours per unit.

d. Yes. ABC will assign less cost to Product A and more cost to Product B.