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	$	79,000		3		7
Material handling	Number of parts		43,000		64		16
Packaging costs	Number of units		193,000		105,000		44,000
		$	315,000

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

$2.75.

$1.85.

$2.77.

$2.11.