GreenGrowth Foods is developing a new line of organic snacks and wants to set a target cost based on market demand and competitor prices. The company estimates that the target selling price for the snacks should be $3.50 per unit to remain competitive in the market. If GreenGrowth Foods aims for a profit margin of 20% on sales revenue and anticipates variable costs of $1.50 per unit, calculate the target cost per unit. Discuss the implications of target costing for pricing strategy and profitability.