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Campbell Chairs, Incorporated makes two types of chairs. Model Diamond is a high - end product designed for professional offices. Model Gold is an economical

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 competitic 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:
\table[[Direct Cost per Unit,Model Dia,amond (D),Model Gold (G)],[Direct materials,$19.4l,per unit,$9.30 per unit],[Direct labor,$19.00? hour 2.00,hours production time,$19.00? hour 1.00 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 $73.
Required
a. Compute the cost per unit for both products.
b. Dan Barker, the chief engineer, told Ms. Silva that the company is currently making 93 units of Model Diamond per batch and 203 units of Model Gold per batch. He suggests doubling the batch sizes to cut the number of setups in half, thereby reducing the se cost by 50 percent. Compute the cost per unit for each product if Ms. Silva adopts his suggestion.
(For all requirements, round intermediate calculations and final answers to 2 decimal places.)
\table[[Type of Product,Cost per Unit,],[a. Model Diamond,,],[a. Model Gold,,],[b. Model Diamond,$,257.91],[b. Model Gold,$,257.92]]
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