Paolello, Inc., manufactures and sells two products: Product P5 and Product N5. 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 P5	400	8.0	3,200
Product N5	300	11.0	3,300
Total direct labor-hours			6,500

The direct labor rate is $24.60 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product P5	$111.60
Product N5	$131.70

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 P5	Product N5	Total
Labor-related	DLHs	$80,210	3,200	3,300	6,500
Machine setups	setups	70,776	400	500	900
General factory	MHs	283,104	3,700	3,500	7,200
		$434,090

The overhead applied to each unit of Product P5 under activity-based costing is closest to:

$620.13 per unit

$541.07 per unit

$363.71 per unit

$534.24 per unit