Total Manufacturing Cost, Income Statement, Unit Cost, and Selling Price Two inventors, recently organized as Innovation, Inc., consult you regarding a planned new product.They have estimates of the costs of materials, labor, overhead, and other expenses for 2016 but need to know how much to charge for each unit to earn a profit in 2016 equal to 15% of their estimated total long-term investment of $560,000 (ignore income taxes). Their plans indicate that each unit of the new product requires the following: Direct Material 4 lb. of a material costing $7 per Ib. Direct labor 2 hrs. of a metal former's time at $15.40 per hr. 0.6 hr. of an assembler's time at $11.20 per hr. Major items of production overhead would be annual rent of $65,044 for a factory building, $40,124 rent for machinery, and $30,380 of indirect material. Other production overhead is estimated to be $326,592. Selling expenses are an estimated 30% of total sales, and non-factory administrative expenses are 20% of total sales. The consensus at Innovation is that during 2016 10,000 units of product should be produced for selling and another 2,000 units should be produced for the next year's beginning inventory. Also, an extra 3,000 pounds of material will be purchased as beginning inventory for the next year. Because of the nature of the manufacturing process, all units started must be completed, so work in process inventories are negligible. X X X Required a. Incorporate the above data into a schedule of estimated total manufacturing costs and compute the unit production cost for 2016. Do not use negative signs with any of your answers. Estimated Total Manufacturing Cost For the Year Ended December 31, 2016 Direct material: Beginning materials inventory 0 Cost of materials purchased Cost of material available X Less: Indirect materials used X Total materials used OX Ending materials inventory Less: Direct materials used $ OX Direct labor Manufacturing overhead Indirect material Building rent Machinery rent X Other factory overhead Total manufacturing overhead X Total manufacturing costs $ Round answer to two decimal places. Product cost per unit b. Prepare an estimated income statement that would provide the target amount of profit for 2016. X X X X X X X $ 0X Income Statement For the Year Ended December 31,2016 X $ Cost of goods sold Gross profit on sales Operating expenses: X$ OX 0x OX 0x 0 X X OX c. What unit sales price should Innovation charge for the new product? | X