Lillich, Incorporated, manufactures and sells two products: Product U$6$ and Product R$5.$ Data concerning the expected production of each product and

the expected total direct labor$-$hours $($DLHs$)$ required to produce that output appear below:

The direct labor rate is $$27\mathrm{.}60$ per DLH$.$ The direct materials cost per unit for each product is given below:

The company is considering adopting an activity$-$based costing system with the following activity cost pools, activity measures, and expected activity:

Which of the following statements concerning the unit product cost of Product U$6$ is true? $($Round vour intermediate calculations to $2$ decimal places.$)$

TB MC Qu$.4-50($Algo$)$ Lillich, Incorporated, manufactures and...

Lillich, Incorporated, manufactures and sells two products: Product U$6$ and Product R$5.$ 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 U$67509\mathrm{.}57,125$

Product R$51,1206\mathrm{.}57,280$

Total direct labor$-$hours $14,405$

The direct labor rate is $$27\mathrm{.}60$ per DLH$.$ The direct materials cost per unit for each product is given below:

Direct Materials Cost per Unit

Product U$6$ $ $250\mathrm{.}40$

Product R$5$ $ $167\mathrm{.}80$

The company is considering adopting an activity$-$based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity

Product U$6$ Product R$5$ Total

Labor$-$related DLHs $ $201,6387,1257,28014,405$

Production orders orders $72,8401,3501,2502,600$

Order size MHs $1,020,6086,5006,80013,300$

$ $1,295,086$

Which of the following statements concerning the unit product cost of Product U$6$ is true? $($Round your intermediate calculations to $2$ decimal places.$)$

Multiple Choice

The unit product cost of Product U$6$ under traditional costing is greater than its unit product under activity$-$based costing by $$340\mathrm{.}31.$

The unit product cost of Product U$6$ under traditional costing is less than its unit product cost under activity$-$based costing by $$340\mathrm{.}31.$

The unit product cost of Product U$6$ under traditional costing is greater than its unit product under activity$-$based costing by $$5\mathrm{.}63.$

The unit product cost of Product U$6$ under traditional costing is less than its unit product cost under activity$-$based costing by $$5\mathrm{.}63.$