Finch 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 $ $20\mathrm{.}00$ per unit $$10\mathrm{.}70$ per unit

Direct labor $ $17\mathrm{.}60/$hour $\backslash$times $2\mathrm{.}00$ hours production time $ $17\mathrm{.}60/$hour $\backslash$times $1\mathrm{.}00$ hour production time

Category Estimated Cost Cost Driver Use of Cost Driver

Unit level $ $280,800$ Number of units D: $19,000$ units; G: $33,000$ units

Batch level $783,000$ Number of setups D: $108$ setups; G: $162$ setups

Product level $532,000$ Number of TV commercials D: $5$; G: $14$

Facility level $490,000$ Number of machine hours D: $2,200$ hours; G: $2,700$ hours

Total $ $2,085,800$

The market price for office chairs comparable to Model Diamond is $$116$ and to Model Gold is $$77.$

Required

Compute the cost per unit for both products.

Dan Barker, the chief engineer, told Ms$.$ Silva that the company is currently making $176$ units of Model Diamond per batch and $204$ 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.