Lillich, Inc., manufactures and sells two products: Product U6 and Product R5. 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 U6	710	9.1	6,461
Product R5	1,090	6.1	6,649
Total direct labor-hours			13,110

The direct labor rate is $27.20 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product U6	$250.00
Product R5	$167.40

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 U6	Product R5	Total
Labor-related	DLHs	$	199,638	6,461	6,649	13,110
Production orders	orders		70,840	1,150	1,050	2,200
Order size	MHs		1,018,608	6,100	6,400	12,500
		$	1,289,086

Which of the following statements concerning the unit product cost of Product U6 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 U6 under traditional costing is less than its unit product cost under activity-based costing by $348.33.

• The unit product cost of Product U6 under traditional costing is less than its unit product cost under activity-based costing by $3.93.

• The unit product cost of Product U6 under traditional costing is greater than its unit product cost under activity-based costing by $3.93.

• The unit product cost of Product U6 under traditional costing is greater than its unit product cost under activity-based costing by $348.33.