Campbell Chairs, Incorporated 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:

Direct Cost per Unit Model Diamond $($D$)$ Model Gold $($G$)$

Direct materials $ $19\mathrm{.}40$ per unit $$9\mathrm{.}30$ per unit

Direct labor $ $19\mathrm{.}00/$hour $\backslash$times $2\mathrm{.}00$ hours production time $ $19\mathrm{.}00/$hour $\backslash$times $1\mathrm{.}00$ hour production time

Category Estimated Cost Cost Driver Use of Cost Driver

Unit level $ $341,700$ Number of units D: $10,000$ units; G: $41,000$ units

Batch level $1,116,000$ Number of setups D: $108$ setups; G: $202$ setups

Product level $740,000$ Number of TV commercials D: $5$; G: $15$

Facility level $405,000$ Number of machine hours D: $2,400$ hours; G: $2,100$ hours

Total $ $2,602,700$

The market price for office chairs comparable to Model Diamond is $$122$ and to Model Gold is $$73.$

Required

Compute the cost per unit for both products.

Dan Barker, the chief engineer, told Ms$.$ Silva that the company is currently making $93$ units of Model Diamond per batch and $203$ 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.Campbell Chairs, Incorporated 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:

The market price for office chairs comparable to Model Diamond is $$122$ and to Model Gold is $$73.$

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 $93$ units of Model Diamond per batch and $203$

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.