Two inventors recently organzied as innovaction inc consult you regarding a new product. They have estimates of the annual costs of materials, labor, overhead and other expenses but need to know how much to charge for each unit to earn a profit equal to $15\%$ of their estimated total long$-$term investment of $$400,000($ignore income tax$).$ Their plans indicate that each unit of the new product requires the following: Direct Materials: $4$ lbs of a material costs $$5$ lb; direct labor: $2$ hours of a metal former's time at $$11$ hr$,\mathrm{.}6$ hr of an assemblers time at $$8/$hr$.$

Major items of production overhead would be annual rent of $$46,460$ for a factory building, $$28,660$ rent for machinery, and $$21700$ of indirect materials. Other production overhead estimated to be $$233280.$ Selling expenses are an estmated $30\%$ of total sales and non$-$factory administrative expenses are $20\%$ of total sales.

The consesus at innovation is that during the year, $10,000$ unites of product should be produced for selling and another $2000$ units should be produced for next years beginning inventory. Also, an extra $3000$ pounds of materials will be purchased beggining inventory for the next year. Because of the nature of the manufacturing process all unites must be completed so work$-$in process inventories are negligible.

Required: incorproate the above date into a schedue of estimated manfuacturing costs and compute the unit production cost for the year. Prepare an estimated income statement that would provide the target amount of profit for the year. What unit sales price should innovation charge for the new product?