Fortran Industries produces the electrical elements for the stoves. Each item sells for $ 20 and the company sells approximately 2,000,000 each year. The cost per unit as follows:

Direct material $ 4.00 Labor $ 3.00 Other costs Variable manufacturing $ 2.50 Fixed Manufacturing $ 5.00 Variable distribution $ 1.50 Fixed distribution $ 1.00 The variable cost per unit for each item is: