Winthrop Manufacturing Produces a Product That Sells for $50

Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute the contribution margin per unit if the machine is purchased.

A) $22.50.
B) $26.00.
C) $29.50.
D) $28.50.
E) $27.50.