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.