Cars Inc. makes two types of cars, Basic and Deluxe, and reports the following data to be used in applying activity based costing. The company budgets production of 12,000 Basic cars and 4000 Deluxe cars Activity Cost Pool Activity Cost Driver Number of Setups Number of Parts Machine Hours Cost Assigned to Pool Basic Deluxe Machine Setup Materials Handling Machine 400 Setups 20 Parts 40 parts per per unit unit 2 MH per 3 MH per unit 300,000.00 600 Setups 500,000.00 1,440,000.00 epreciation (MH) unit 2,240,000.00 Using the information above compute the overhead rate for the materials handling activity cost pool using activity-based costing. O $2.08 per part $2.50 per part O $5.00 per part $1.25 per part