WQL Group is a pharmaceutical company based in the United States. Last year, the government imposed a maximum ceiling price on wound care management products with an aim to make health care more accessible and affordable. A recent development in ulcer care has created an opportunity for WQL to create a new product, PLMT78. The expected demand for this product for the next six years is 500,000 units with a maximum selling price of $18. Product design and process development costs are expected to be $1.5m with a cost allocated to marketing of $1m. The additional investment in capital equipment as a direct result of this new product is expected to be $1.7m. WQLs medium-term profit plans suggest that products should deliver a profit margin of 20 per cent on sales.

What is the target cost per unit of PLMT78? Show all workings