=+8-38 KKK Multiple choice, comprehensive problem on relevant costs OBJECTIVE 2 The following are Class Ltd’s unit costs of manufacturing and marketing a stylish pen at an output level of 20000 units per month:

Manufacturing cost Direct materials $1.00 Direct manufacturing labour 1.20 Variable manufacturing overhead cost 0.80 Fixed manufacturing overhead cost 0.50 Marketing cost Variable 1.50 Fixed 0.90 Required The following situations refer only to the preceding data; there is no connection between the situations. Unless stated otherwise, assume a regular selling price of $6 per unit. Choose the best answer to each question. Show your calculations.

1 For an inventory of 10000 units of the stylish pen presented in the balance sheet, the appropriate unit cost to use is:

(a) $3.00,

(b) $3.50,

(c) $5.00,

(d) $2.20 or

(e) $5.90.