Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 80,000 units were produced and 75,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:

	Fixed Costs	Variable Costs
Raw materials	--	$2.50 per unit produced
Direct labour	--	1.75 per unit produced
Factory overhead	$100,000	0.70 per unit produced
Selling and administrative	70,000	0.90 per unit sold

What was Indiana Corporation's unit cost under absorption costing?

Multiple Choice

• $5.50

• $6.50

• $7.10

• $6.20