Hans Olo Bros. has developed a new product that will be marketed for the first time next year. Although the marketing department estimates that 35,000 units could be sold at $36 per unit, Hans Olos management has allocated only enough manufacturing capacity to produce a maximum of 25,000 units of the new product annually. The fixed costs associated with the new product are\ $450,000 for the year. Data associated with each unit of product are presented below. Hans Olo is subject to a 40% income tax rate on accounting pre-tax income.\ Variable Costs\ Direct material $7.00\ Direct labor 3.50\ Manufacturing overhead 4.00\ Total variable manufacturing cost $14.50\ Selling expenses 1.50\ Total variable cost $16.00\ \ Hans Olos management will not approve the manufacture of the new product after next year unless the after-tax accounting income is at least $75,000 the first year.\ What is the minimum selling price per unit to achieve this target income?

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1 Calculate the total fixed costs Fixed Costs 450000 2 Calculate the total variable cost per unit To... View the full answer