Mario has incurred the following costs in relaton to a unit of

inventory:

Raw materials cost 1.50

Import duties 0.40

Direct labour 0.50

Subcontracted labour costs 0.80

Recoverable sales tax 0.20

Storage costs 0.05

Producton overheads (per unit) 0. 25

There was a problem with the first batch of items produced, so abnormal wastage costs of

$0.10 per unit have also been incurred by Mario.

At what cost should Mario value this inventory in its financial

statements?

A $3.50

B $3.45

C $3.80

D $ 3.70