5) Michigan Company has budgeted the following costs for the production of its only product:

Direct Materials $35,000

Direct Labor 25,000

Variable indirect production costs 30,000

Fixed indirect production costs 15,000

Variable selling and administrative costs 7,500

Fixed selling and administrative costs 12,500

Total Costs $125,000

Michigan Company wants a profit of $50,000, and expects to produce 1,000 units. The market price is $150 per unit. What is the target cost per unit of the product?

A) $100 per unit (this is the right answer) PLEASE EXPLAIN WHY

B) $125 per unit

C) $150 per unit

D) $175 per unit