Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,900 units of Basic Product and 1,500 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 $99,085.

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:

Activity Cost Pool	Estimated	Expected Activity
	Overhead Costs	Basic Product	Deluxe Product	Total
Activity 1	$ 30,600	1,000	600	1,600
Activity 2	17,475	1,600	400	2,000
General Factory	51,010	570	900	1,470
Total	$ 99,085

(Note: The General Factory costs are allocated on the basis of direct labor-hours.)

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