Management at Pew Co. is considering the development of an automated machine called the AutoMate. After conferring with the design engineers, the controller's staff assembled the following data about this product:

Target selling price	$500 per unit
Desired profit percentage	50% of total unit cost
Projected unit demand	5,000 units
Activity-based cost rates:
Materials handling	1% of direct materials and purchased parts cost
Engineering	$20 per unit
Production and assembly	$10 per machine hour
Delivery	$7 per unit
Marketing	$4 per unit
Per-unit data:
Direct materials cost	$160
Purchased parts cost	$40
Manufacturing labor:
Hours	2
Hourly labor rate	$15
Assembly labor:
Hours	3
Hourly labor rate	$10
Machine hours	4

1. Compute the product's target cost. Round your answer to the nearest dollar. $ per unit

2. Compute the product's projected unit cost based on the design engineers' estimates. $ per unit

3. Should management produce and market the AutoMate? SelectYesNoItem 3

Defend your answer.

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