Brislin Gifts Makes Ceramic Mugs and Has the Following Amounts

Brislin Gifts makes ceramic mugs and has the following amounts during 2014 (Assume the same unit costs in all years) : $$\begin{array} { l r } \text { Selling price } & \$ 9.00 \text { per mug } \\\text { Variable production cost } & \$ 2.50 \text { per mug } \\\text { Variable selling cost } & \$ 1.10 \text { per mug } \\\text { Fixed production cost } & \$ 100,000 \text { per year } \\\text { Fixed selling and administrative cost } & \$ 60,000 \text { per year }\end{array}$$ Production and sales in units for the first three months of 2014 are as follows: $\begin{array}{lll}\text { Year }&\text {Production }&\text {Sales }\\\text { January } & 50,000 & 44,000 \\\text { February } & 40,000 & 45,000 \\\text { March } & 50,000 & 45,000\end{array}$
Inventory at January 1, 2014 consisted of 1,000 mugs. How much is the inventory cost per unit under variable costing during March?

A) $4.50
B) $3.60
C) $2.50
D) $5.60