Answer = $12 inventory cost or $1.2 per unit
Explanation
Inventory turn = COGS/inventory = $50m / $5m = 10
Per-unit inventory costs = Annual inventory costs/Inventory turns
= 40%/10 = 4%
So, the inventory cost per unit for a $30 (COGS) item will be = $30 × 4% = $1.2
And inventory cost is 40% of COGS therefore inventory cost for $30 will be $12 ($30 × 40%)
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