A company is changing from traditional overhead absorption costing, using labour hours as the base, to an activity based costing system. The budgeted data for the next year's set-up costs are as follows: Set up costs Labour hours Number of set ups per year $240,000 50,000 500) Details for product A (which is included in the above figures) are as follows: Output Labour hours per unit Batches per set up Units per batch 720 units 2 hours As a result of the change, the set-up costs charged to one unit of product A will: decrease by $2.80. increase by $2.80. decrease by $7.60 increase by $7.60