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	$	96,000		12		28
Material handling	Number of parts		46,000		42		28
Packaging costs	Number of units		225,500		90,000		60,000
		$	367,500

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

Multiple Choice

• $2.13.

• $2.93.

• $2.37.

• $2.45.