Draco Corp. has two products: A and B. The annual production and sales of Product A is 2,350 units and of Product B is 1,750 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.7 direct labor-hours per unit. The total estimated overhead for next period is $106,000. 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:

Activities Cost Pools	Estimated Overhead Costs		Expected Activity
			Product A	Product B	Total
Activity 1	$32,754		1,650	1,250	2,900
Activity 2	18,656		2,350	850	3,200
General Factory	54,590		1,225	1,440	2,665
Total	$106,000

The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to:

$7.94

$33.13

$40.96

$5.83

Draco Corp. has two products: A and B. The annual production and sales of Product A is 2,350 units and of Product B is 1,750 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.7 direct labor-hours per unit. The total estimated overhead for next period is $106,000. 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:

Activities Cost Pools	Estimated Overhead Costs		Expected Activity
			Product A	Product B	Total
Activity 1	$32,754		1,650	1,250	2,900
Activity 2	18,656		2,350	850	3,200
General Factory	54,590		1,225	1,440	2,665
Total	$106,000

The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to:

$7.94

$33.13

$40.96

$5.83