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: Expected Activity Estimate Overhead Deluxe Actlvity Cost Pool Activity 1 Activity 2 General Factory Total Total 1,600 2,000 1,470 Costs Basic Product Product $30,600 17,475 51,010 $99,085 1,000 1,600 570 600 400 900 The overhead cost per unit of Deluxe Product under the tracitional costing system is closest to $40.44 $5.24 $20.82. O s1148