Adams Company has two products: A and B. The annual production and sales of Product Als 2,300 units and of Product Bis 1700 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: Expected Activity Estimated Overhead Costs Activities Cost Pools Product A Product B Total 2,800 Activity 1 $32,592 1,600 1,200 3.100 18,564 2,300 800 Activity 2 General Factory Total 1,170 1,380 2,550 54,319 $105,475 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) The predetermined overhead rate (1.e., activity rate) for Activity 2 under the activity-based costing system is closest to O $5.99 O $42.60 $8.07 O $34.02