Adios Company Provided the Following Information Regarding Its One and Only

Multiple Choice

Adios Company provided the following information regarding its one and only product -skateboards. $$\begin{array} { l l } \text { Direct materials used } & \$ 350,000 \\\text { Direct labor } & 170,000 \\\text { Fixed overhead } & 80,000 \\\text { Variable overhead } & 20,000 \\\text { Variable selling and administrative } & 50,000 \\\text { Units produced and sold } & 40,000\end{array}$$ The difference in manufacturing cost per unit, if the absorption approach is used in place of the contribution approach, is:

A) cost per unit decreases by $0.75
B) cost per unit increases by $2
C) cost per unit decreases by $2
D) cost per unit increases by $0.75