3 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: 16.66 points Model Gold (G) Skipped Direct Cost Model Diamond (D) per Unit Direct materials $19.80 per unit hours Direct labor $18.50/hourx 2.00 production time $9.40 per unit hour $18.50/hourx1.00 production time eBook Estimated Cost Cost Driver Print Category Unit level $ 243,800 Number of units Reference 1,120,000 Batch level Product level Facility level Use of Cost Driver D: 16,000 units; G: 30,000 units D: 108 setups; G: 242 setups D: 7; G: 13 D: 2,100 hours; G: 2,800 hours Number of setups Number of TV commercials Number of machine hours 720,000 441,000 Total $2,524,800 The market price for office chairs comparable to Model Diamond is $117 and to Model Gold is $78. 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 148 units of Model Diamond per batch and 124 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