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Honda Heaven produces and sells an auto part for $20.00 per unit. Direct materials are $8.00 per unit, while direct manufacturing labor averages $1.50 per unit. Variable overhead is $0.50 per unit and fixed overhead is $250,000.00 per year. Administrative expenses, all fixed, run $90,000.00 per year, with sales commissions of $2.00 per part. Production is 100,000 parts per year. This year, 75,000 parts were sold. What is the inventory cost per part using variable costing?

a.            $10.00

b.            $12.00

c.             $14.50

d.            $16.50

e.            $9.50

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