Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,800 units of Basic Product and 1,400 units of Deluxe Product. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Basic Product requires 0.4 direct labor hours per unit and Deluxe Product requires 0.8 direct labor hours per unit. The total estimated overhead for next period is $99,035. 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: Estimated Overhead Costs $30,588 Ac Deluxe Activity Cost Pool Activity 1 Activity 2 General Factory Total Basic Product Product Total 1,500 2,200 720 400 350 1,120 ,900 2,550 1,840 17,460 50,987 $99,035 Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.) The predetermined overhead rate under the traditional costing system is closest to: $6.85 O $53.82 $16.10 O $2771