Extracts from Cost Information of Hebar Corp

Multiple Choice

Extracts from cost information of Hebar Corp.:

Assuming that setup-hours is considered a more effective cost drive for allocating setup costs than direct labor-hours.Which of the following statements is true of Hebar's setup costs under traditional costing?

A) L3 pack is undercosted by $5,850
B) L7 pack is undercosted by $5,750
C) L3 pack is overcosted by $5,850
D) L7 pack is overcosted by $5,850