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 $400,000 (ignore income taxes). Their plans indicate that each unit of the new product requires the following Direct Material 4 lb. of a material costing $5 per lb. Direct labor 2 hrs of a metal former's time at $11 per hr. 0.6 hr. of an ssemblers time at $8 per hr Major items of production overhead would be annual rent of $46.460 for a factory building, $28.660 rent for machinery and $21.700 of indirect material. Other production overhead is estimated to be $233.280. 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 years 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. 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 255,000 Cost of materials purchased V Estimated Total Manufacturing Cost For the Year Ended December 31, 2016 Direct material: Beginning materials inventory 255,000 255,000 15,000 Cost of materials purchased # Cost of material available Less: Ending materials inventory $ Total materials used 240,000 Less: Indirect materials used 21,700 V Direct materials used s 233,280 x Direct labor 891,700 Manufacturing overhead Indirect material 21,700 46460 28,660 233,280 Building rent Machinery rent Other factory overhead Total manufacturing overhead 330,100 Total manufacturing costs Round answer to two decimal places. Product cost per unit 74.31 X b. Prepare an estimated income statement that would provide the target amount of profit for 2 Income Statement For the Year Ended December 31, 2016 Sales 0 x Cost of goods sold Gross profit on sales Operating expenses: Selling expenses Administrative expenses 60,000 Net income c. What unit sales price should Innovation charge for the new product