Total fixed costs for Herman Enterprises are $200,000. Total costs, both fixed and variable, are $550,000 if 100,000 units are produced. The company had a long term loan of $250,000. If the corporate tax rate is 40%, and the cost of capital is 12%, what is the variable cost per unit? A) $2.00/unit. B) $3.50/unit. C) $4.00/unit. D) $5.50/unit. E) None of the above

Iotal fixed costs for Herman Enterprises are $200,000. Total costs, both fixed and variable, are $550,000 if 100,000 units are produced. The company had a long term loan of $250,000. If the corporate tax rate is 40%, and the cost of capital is 12%, what is the variable cost per unit? A) $2.00/ unit. B) $3.50/ unit. C) $4.00/ unit. D) $5.50/ unit. E) None of the above