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 below.

			Budgeted Activity
Activity Cost Pool	Budgeted Cost	Product A	Product B	Product C
Activity 1	$104,720	6,800	9,800	20,800
Activity 2	$74,520	7,800	15,800	8,800
Activity 3	$126,000	3,300	1,800	2,400

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

	The activity rate under the activity-based costing system for Activity 2 is $2.80.
	The activity rate under the activity-based costing system for Activity 2 is $16.80.
	The activity rate under the activity-based costing system for Activity 2 is $2.30.
	The activity rate under the activity-based costing system for Activity 2 is $21.90.
	The activity rate under the activity-based costing system for Activity 2 is $3.95.