PeonyCorp. makes and sells a product that normally sells for $25. Because of a defectivemachine, 1,000 units were not produced correctly and remain in inventory. Each of the defectiveunit has the following costs assigned to it by the company's absorption costing system:

Direct materials $5.00 per unit

Direct labor $3.00 per unit

Variable Overhead $1.25 per unit

Fixed Overhead $0.5 per unit

The company has two options regarding the defective units: (1) be sold for $8 per unit, or (2) repaired and sold at the regular price.

Q:) What is the maximum cost of repair per unit in order for the company to choose option (2)?