McCaskey Corporation uses an activity-based costing system with the following three activity cost pools:

Activity Cost Pool	Total Activity
Fabrication	50,000	machine-hours
Order processing	625	orders
Other	N/A

The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.

The company has provided the following data concerning its costs:

Wages and salaries	$433,000
Depreciation	160,000
Occupancy	169,000
Total	$762,000

The distribution of resource consumption across activity cost pools is given below:

	Activity Cost Pools
	Fabrication	Order Processing	Other	Total
Wages and salaries	20%	70%	10%	100%
Depreciation	10%	30%	60%	100%
Occupancy	10%	70%	20%	100%

The activity rate for the Fabrication activity cost pool is closest to:

→	$2.39 per machine-hour
	$1.99 per machine-hour
	$3.81 per machine-hour

Allocations to the Fabrication activity cost pool:

Wages and salaries (20% × $433,000)	$86,600
Depreciation (10% × $160,000)	16,000
Occupancy (10% × $169,000)	16,900
Total	$119,500