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	750	9.5	7,125
Product R5	1,120	6.5	7,280
Total direct labor-hours			14,405

The direct labor rate is $27.60 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product U6	$250.40
Product R5	$167.80

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	$	201,638	7,125	7,280	14,405
Production orders	orders		72,840	1,350	1,250	2,600
Order size	MHs		1,020,608	6,500	6,800	13,300
		$	1,295,086

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

• The unit product cost of Product U6 under traditional costing is greater than its unit product cost under activity-based costing by $340.31.

• The unit product cost of Product U6 under traditional costing is less than its unit product cost under activity-based costing by $5.63.

• The unit product cost of Product U6 under traditional costing is greater than its unit product cost under activity-based costing by $5.63.

• The unit product cost of Product U6 under traditional costing is less than its unit product cost under activity-based costing by $340.31.