Washie manufactures two types of products for washing vehicles: the washing mitt, and the polishing cloth. Management is considering ABC and has gathered information on the potential activity areas to be used. Activity Estimated Activity Measure Manufacturing Overhead Cost Design Design hours $12,000 Setups Number of set-ups $40,000 Materials Meters of Handling fabric $30,000 Production Machine Hours $250,000 During the year, the company sold 100,000 washing mitts and 50,000 polishing cloths. The company has determined the expected activity for each of the product lines to be:Activity Polishing Measure Washing Mitt Cloth # of design hours 50 5 # of setups 30 20 # of meters of fabric 4,000 1,000 # of machine hours |40,000 10,000 Compute the activity rate for Design using activity based costing. ( 1) $120 O 2) $218 3) $240 4) $400