Adams Company has two products: A and B. The annual production and sales of Product A is 2,300 units and of Product B is 1,700 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $105,475. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:

Activities Cost Pools	Estimated Overhead Costs		Expected Activity
			Product A	Product B	Total
Activity 1	$32,592		1,600	1,200	2,800
Activity 2	18,564		2,300	800	3,100
General Factory	54,319		1,170	1,380	2,550
Total	$105,475

(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)

The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to:

$5.99

$34.02

$42.60

$8.07