A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

				Budgeted Activity
Activity Cost Pool	Budgeted Cost			Product A			Product B			Product C
Activity 1	$	75,000			6,500			9,500			20,500
Activity 2	$	50,000			7,500			15,500			8,500
Activity 3	$	92,000			3,000			1,500			2,125

Which of the following statements is true regarding this company's activity rates?

Multiple Choice

• The activity rate under the activity-based costing system for Activity 2 is $1.59.

• The activity rate under the activity-based costing system for Activity 2 is $17.53.

• The activity rate under the activity-based costing system for Activity 2 is $3.02.

• The activity rate under the activity-based costing system for Activity 2 is $13.89.

• The activity rate under the activity-based costing system for Activity 2 is $2.05.