What is the difference in the cost of Widget B, per product, using a traditional labor allocation vs. activity based costing method, assuming the three main cost activities are:

> Direct Labor

> Machine Hours

> # of Purchase Orders

Assume the following bases & General Ledger Data:
Direct labor hours =	1000
Machine hours =	250
Purchase orders =	100

	Widget A	Widget B	Total
Direct labor hours =	400	600	1000
Machine hours =	100	150	250
Purchase orders =	50	50	100

General Ledger
Payroll taxes	$1,700
Machine maintenance	$750
Purchasing Dept. labor	$3,500
Fringe benefits	$1,500
Purchasing Dept. Supplies	$300
Equipment depreciation	$1000
Electricity	$1500
Unemployment insurance	$1,300

	A.	The traditional method UNDER counts the cost by $475 per unit
	B.	The traditional method OVER counts the cost by $475 per unit
	C.	The traditional method UNDER counts the cost by $380 per unit
	D.	The traditional method OVER counts the cost by $380 per unit

$1,300