Target cost

i need help

HD Co manufactures and repairs mobile phones, offering repair contracts for a period of a year. HD Co has been among the leaders in technical innovation in this highly competitive market.

Having previously used traditional costing methods, HD Co is considering using target costing for its new model of phone. Market research indicates that the maximum selling price HD Co can charge for its new model is $75, and HD Co’s board has agreed that this should be the selling price. At a $75 selling price, HD Co should sell 250,000 units. HD Co’s target profit margin on the new phone is 40%.

Cost data relating to the new phone is as follows:

Production costs per unit $
Direct material 10.0
Direct labour 5.00
Machinery time 11.00
Set-up 4.00
Inspection and testing 9.00
____
39.00
____

Total non-production costs $000
Design 900
Marketing 1,000
Distribution 800

Calculate the cost gap per phone on the new phone to the nearest $0.01.
my answer is $9
but the correct answer $4.80