Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:

Activity	Cost Driver	Amount	M	XY
Production setups	Number of setups	$82,000	8	12
Material handling	Number of parts	48,000	56	24
Packaging costs	Number of units	130,000	80,000	50,000
		$260,000

What is the total overhead per unit allocated to Product M using activity-based costing (ABC)?

$2.60.

$2.27.

$2.00.

$1.83.