From a marginal analysis perspective, what is the inventory carry cost for Andrews if the company carries one additional unit of Awe in inventory at the end?

• $3.19

• $1.85

• $6.38

• $15.40

Annual Report Andrews C59559 Dec. 31 2019 2019 Income Statement Product Name Ace Awe Art Na Na Na Na Total Common Size Ant $58,475 $ Sales $36.835 S32.408 $35,573 SO SO SO SO S163 291 100% Variable Costs: Direct Labor S9,424 $7,613 $10.805 SO SO SO SO S44,125 27% S16,283 $21,869 Direct Material S14,346 $11,537 SO SO SO SO S60,305 36.9% $12,553 S686 Inventory Carry S826 $1,491 S135 SO SO SO SO $3,138 1.9% Total Variable S24,596 $20,852 $23.832 $38.288 SO SO SO SO S107.568 65.9% S12.239 S11,556 $11.741 S20.187 SO SO SO SO S55,723 34.1% Contribution Margin Period Costs: : Depreciation $1,068 $1,047 $2,260 S2,080 SO SO SO SO S6,455 4% R&D S869 S881 SO SO SO SO SO SO $1,750 1.1% Promotions $1,200 $1,200 $1,200 $1,200 SO SO SO SO $4,800 2.9% Sales $1,000 $1,000 $2,000 $1,000 SO SO SO SO $5,000 3.1% Admin S290 S255 S280 S460 SO SO SO SO S1,283 0.8% Total Period S4,426 $4,382 S5,740 $4,740 SO SO SO SO $19.288 11.8% Net Margin $7.813 S7,173 S6,001 S15,448 SO SO SO SO S36,435 22.3% Other S29 0% 0 EBIT S36,406 22.3% Short Term Interest $1,493 0.9% Long Term Interest $3,357 2.1% Taxes S11,045 6.8% Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15- year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing Profit Sharing S410 0.3% Net Profit S20, 101 12.3% Variables Margins