Delphi Company has developed a new project that will be marketed for the first time during the next fiscal year. Although the Marketing Department estimates that 35,000 units could be sold at $36 per unit, Delphi's management has allocated only enough manufacturing capacity to produce a maximum of 25,000 units of the new product annually. The fixed costs associated with the new product are budgeted at $450,000 for the year, which includes $60,000 for depreciation on new manufacturing equipment. Data associated with each unit of product are presented as follows. Delphi is subject to a 40% income tax rate.

                                 Variable Costs

Direct material                           $7.00    

Direct labor                               3.50    

Manufacturing overhead                   4.00    

Total variable manufacturing cost         14.50    

Selling expenses                           1.50    

Total variable cost                       $16.00    

Delphi Company's management has stipulated that it will not approve the continued manufacture of the new product after the next fiscal year unless the after-tax profit is at least $75,000 the first year. The unit selling price to achieve this target profit must be at least

A. $36.60.

B. $37.00.

C. $34.60.

D. $39.00.