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 $87,000 7,700 10,700 21,700

Activity 2 $62,000 8,700 16,700 9,700

Activity 3 $116,000 4,200 2,700 3,325

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 $2.17.
• The activity rate under the activity-based costing system for Activity 2 is $11.34.
• The activity rate under the activity-based costing system for Activity 2 is $1.77.
• The activity rate under the activity-based costing system for Activity 2 is $15.28.
• The activity rate under the activity-based costing system for Activity 2 is $3.50.