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Addy Company has two products: A and B. The annual production and sales of Product A is 1,850 units and of Product B is 1,250

Addy Company has two products: A and B. The annual production and sales of Product A is 1,850 units and of Product B is 1,250 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 $100,500. 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:

Total Estimated Overhead Costs Expected Activity
Product A Product B Total
Activity 1 $31,055 1,150 750 1,900
Activity 2 17,688 1,850 350 2,200
General Factory

51,757

555 750 1,305
Total

$100,500

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

The overhead cost per unit of Product B under the traditional costing system is closest to:

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