Elegant Seating Ltd$.$ produces two types of sofas: Luxury and Standard. The manufacturing overhead costs are distributed to the products at a rate of $RM50$ per machine hour. The production information for the two models is as follows:

$\backslash$table$[[,$Luxury,Standard$],[$Direct materials $($per unit$),$RM $70,$RM $40],[$Direct labor $($per unit$),$RM $45,$RM $30],[$Total Units,$8,000,12,000],[$Machine hours $($per unit$),2,1]]$

The management accountant intends to use the activity$-$based costing method and has identified three activities related to production: setup, manufacturing, and distribution. The data related to these three activities are as follows:

$\backslash$table$[[,$Luxury,Standard,Cost Driver$],[$Setup $($batches$),50,70,$Production batches$],[$Manufacturing $($hours$),16,000,12,000,$Machine hours$],[$Distribution $($deliveries$),100,80,$Number of deliveries$]]$

The total overhead for the company is RM $2,700,000,$ where RM $500,000$ is for setup, RM $1,800,000$ for manufacturing, and RM $400,000$ for distribution.

Calculate the unit cost for Luxury and Standard models using functional$-$based costing and activity$-$based costing methods.

The current selling price for the Luxury model is $$400$ per unit and the marketing manager proposes to reduce its price by $$50$ to increase sales. Is this proposal reasonable and acceptable?