Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 2,100 units of Basic Product and 1,700 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 0.3 direct labor hours per unit and Deluxe Product requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $99,185.

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 poolsActivity 1, Activity 2, and General Factorywith estimated overhead costs and expected activity as follows:

Expected Activity Estimated Overhead Basic Deluxe Activity Cost Pool Activity 1 Activity 2 General Factory Product Costs Product Total $30,624 17,505 51,056 1,200 1,800 800 2,000 500 2,300 1,020 630 1,650 $ 99,185 Total (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.) The overhead cost per unit of Deluxe Product under the activity-based costing system is closest to $28.01 $43.12 $18.57 $25.77