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Addy Company has two products: A and B. The annual production and sales of Product A is 1,700 units and of Product B is 1,100 units. The company has traditionally used direct labour hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labour hours per unit, and Product B requires 0.6 direct labour hours per unit. The total estimated overhead for next period is $98,785. 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 factory overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows:

Expected ActivityActivity Cost PoolEstimated Overhead CostProduct AProduct BTotalActivity 1$40,0001,2206001,820Activity 216,7001,7001501,850General Factory51,1005906901,280Total$107,800

(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labour hours.)

The overhead cost per unit of Product B under the activity-based costing system is closest to which of the following?

Multiple Choice

$26.09

$35.28

$37.16

$38.26