28 Fanning Chairs, Inc. makes two types of chairs. Model Diamond is a high-end product designed for professional offices. Model Gold is an economical product designed for family use. Jane Silva, the president, is worried about cut-throat price competition in the chairs market. Her company suffered a loss last quarter, an unprecedented event in its history. The company's accountant prepared the following cost data for Ms. Silva: skipped Direct Cost per Model Gold (G) Model Diamond (D) Unit Direct materials $20.30 per unit $10.90 per unit $18.20/hour 2.00 hours production time Direct labor $18.20/hour x 1.00 hour production time eBook Estimated Cost Use of Cost Driver Cost Driver Category Unit level D: 11,000 units; G: 44,000 units D: 102 setups; G: 208 setups D: 8; G: 16 286,000 992,000 552,000 Number of units Number of setups Batch level Product level Number of TV commercials Facility level 275,000 Number of machine hours D: 1,700 hours; G: 3,800 hours $2,105,000 Total The market price for office chairs comparable to Model Diamond is $116 and to Model Gold is $79 Required a. Compute the cost per unit for both products. b. Dan Barker, the chief engineer, told Ms. Silva that the company is currently making 108 units of Model Diamond per batch and 212 units of Model Gold per batch. He suggests doubling the batch sizes to cut the number of setups in half, thereby reducing the setup cost by 50 percent. Compute the cost per unit for each product if Ms. Silva adopts his suggestion (For all requirements, round intermediate calculations and final answers to 2 decimal places.) Type of Product Cost per Unit a. Model Diamond Model Gold b. Model Diamond Model Gold