Fortran Industries produces burner elements for stoves. Each element sells for $20, and the company sells approximately 2,000,000 elements each year. Unit cost data for the year follows:

Direct material		$5.00
Direct labor		3.00
Other costs:	Variable	Fixed
Manufacturing	$2.50	$5.00
Distribution	1.50	1.00

The unit cost of an element for variable costing inventory purposes is:

Select one:

a. $15.50

b. $12.00

c. $10.50

d. $7.00