Fedora SpA Is a Wool Hat Manufacturer

Fedora SpA is a wool hat manufacturer.The price of wool is increasing at the rate of 20% a year.Labor cost per hour increases at the rate of 2% a year.During period X1,for 100 CU of sales,the raw materials represented 50% of the cost of manufacturing a hat.Manufacturing labor represented 20% of the cost of manufacturing a hat.Forty percent of both manufacturing and SG&A costs were allowances for depreciation of fixed assets,the rest were labor costs or purchases from third parties that tend to increase at the same rate as manufacturing labor cost per hour.No new investment is considered in X1 or X2.Selling,general,administrative and interest expenses represent 32% of the sales revenue.The working capital needed to support 100 CU of sales is 50 CU that are financed at an average cost of capital of 4% a year (the amount of WCN is expected to remain the same in X2) .Net profit before tax is 8% of the selling price.What is the expected profit per 100 CU of revenue for X2 if selling prices cannot increase more than 5%?

A) 3.17 CU
B) 6.18 CU
C) 5.94 CU
D) 5.88 CU