For inventory valuation, a business applies the first in first out (FIFO) method. In July, there was no opening inventory. The business bought direct materials in July as shown below: 3 July purchases: 2000 kg at $25 per kg; 15 July purchases: 3000 kg at $28 per kg. Every unit needed 4 kg of direct materials. The labour cost per unit was $42. Fixed overhead in July amounted to $85 000. During July, 1000 units were produced and 800 units were sold. Determine the average direct cost for each unit.
- A$148
- B$176
- C$185
- D$233