Karsten, Inc., manufactures and sells two products: Product M8 and Product I2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product M8	700	9.0	6,300
Product I2	300	6.0	1,800
Total direct labor-hours			8,100

The direct labor rate is $21.20 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product M8	$211.30
Product I2	$242.90

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated	Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost	Product M8	Product I2	Total
Labor-related	DLHs	$299,781	6,300	1,800	8,100
Machine setups	setups	46,514	600	700	1,300
General factory	MHs	462,981	4,900	4,800	9,700
		$809,276

The unit product cost of Product I2 under activity-based costing is closest to:

$1,439.33 per unit

$1,133.78 per unit

$1,179.38 per unit

$969.56 per unit