Sanscom Corporation utilizes an activity-based costing system for applying costs to its
two products, P and Q. In the assembly department, material handling costs vary directly with the
number of parts inserted into the product. Machinery is recalibrated and oiled each weekend
regardless of the number of parts inserted during the previous week. Both material handling and
machinery maintenance costs are charged to the product on the basis of the number of parts inserted.
Due to reengineering of the production process for Product P, the number of insertion parts per
finished unit has been reduced. How will the redesign of the production process for Product P affect
the activity-based cost of Product Q?