Baird Modems has excess production capacity and is considering the possibility of making and selling security tokens. The following

estimates are based on a production and sales volume of $1,000$ security tokens.

Unit$-$level manufacturing costs are expected to be $$22\mathrm{.}00.$ Sales commissions will be established at $$1\mathrm{.}20$ per unit. The current facility$-$

level costs, including depreciation on manufacturing equipment $($$$61,000),$ rent on the manufacturing facility $($$$51,000),$ depreciation on

the administrative equipment $($$$13,000),$ and other fixed administrative expenses $($$$69,070),$ will not be affected by the production of

the security tokens. The chief accountant has decided to allocate the facility$-$level costs to the existing product $($modems$)$ and to the

new product $($security tokens$)$ on the basis of the number of units of product made $($i$.$e$.,5,000$ modems and $1,000$ security tokens$).$

Required

a$.$ Determine the per$-$unit cost of making and selling $1,000$ security tokens.

Note: Do not round intermediate calculations. Round your answer to $3$ decimal places.

b$.$ Assuming the security tokens could be sold at a price of $$36$ each, should Baird make the security tokens?

a$.$ Cost per unit

b$.$ Should Baird make the security tokens?