The overhead applied to each unit of Product W2 under activity-based costing is closest to:

A) $501.74 per unit
B) $639.59 per unit
C) $627.18 per unit
D) $351.03 per unit

To calculate the overhead applied to each unit of Product W2 under activity-based costing, we need to use the following formula:
Total overhead cost / Total units produced
Total overhead cost = $5,103,480
Total units produced = 40,000
Therefore, overhead applied per unit = $5,103,480 / 40,000 = $127.59 per unit
Now, we need to add this to the direct material cost and direct labor cost per unit:
Direct material cost = $150 per unit
Direct labor cost = $362.00 per unit
Total cost per unit = $150 + $362.00 + $127.59 = $639.59 per unit
Therefore, the closest answer is B, which is $639.59 per unit.

Computation of activity rates: Computation of the overhead cost per unit under activity-based costing.