A project has earnings before interest and taxes of $5,750, fixed costs of $50,000, a selling price of $13 a unit, and a sales quantity of 11,500 units. Depreciation is $7,500. What is the variable cost per unit?

A) $6.75
B) $7.00
C) $7.25
D) $7.50
E) $7.75

The variable cost per unit can be calculated by first determining the total revenue, then subtracting the fixed costs, depreciation, and earnings before interest and taxes (EBIT) from the total revenue to find the total variable cost. Finally, divide the total variable cost by the quantity of units sold to find the variable cost per unit. Total revenue = $13 * 11,500 = $149,500. Total costs (excluding variable costs) = $50,000 (fixed costs) + $7,500 (depreciation) + $5,750 (EBIT) = $63,250. Total revenue - Total costs (excluding variable costs) = $149,500 - $63,250 = $86,250 (total variable costs). Variable cost per unit = $86,250 / 11,500 units = $7.50.