day . It employs two cake bakers who are paid $2 2 per hour and two bread bakers who are paid . $12 per hour and has a small staff of helpers who account for 25% of the other employee* salaries . Approximately 70 % of its materials , flour , eggs , sugar and oil , are used for cakes ; the remaining 30 % are used for bread . Indirect manufacturing costs are allocated to products on the basis of direct labor hours . During the current year , it started and completed 108 , 000 units of cakes and 14 4 , 000 units of bread at a selling price of $6 per unit and $1. 50 per unit respectively . Annual costs incurred by La Patisserie :" Flour , Eggs , Sugar and Oil $12 2, 800 Office staff salaries 184 , 200 Rent utilities and insurance 61. 400 Baker's wages 195, 840 Salaries of other employees 86 , 400 Sales commissions ( 5%/ ) 43 , 200 Delivery cost 1 . 919 Other material & supplies 23, 025 Office equipment & supplies 1 1 , 129 Total cost $729. 913 Assume that the manufacturing overhead charged to cakes is $80 , 000 . What is the direct cost per unit of cakes ? [ A. $1 . 29. [ B. $2. 69. C C. $2. 27 . 1 97