Red Co. uses the product cost concept of applying the cost-plus approach to product pricing. The following is cost information for the production and sale of 40,000 units of its sole product. Red Co. desires a profit equal to a 15% rate of return on invested assets of $1,200,000.

Fixed factory overhead cost	$80,000.00
Fixed selling and administrative costs	140,000.00
Variable direct materials cost per unit	7.00
Variable direct labor cost per unit	11.00
Variable factory overhead cost per unit	3.00
Variable selling and administrative cost per unit	2.00

The unit selling price for the company's product is _____.

a.$42

b.$28

c.$37

d.$33