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Hello, i need help on question 6. Thank you. Managerial Accounting homework help please. Stuart Chairs, Inc. makes two types of chairs. Model Diamond is

Hello, i need help on question 6. Thank you. Managerial Accounting homework help please.

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Stuart Chairs, Inc. 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 Direct materials Direct labor Model Diamond (D) $19.60 per unit Model Gold (G) $9.20 per unit $17.60/hour 2.00 hours production time $17.60/hour x1.00 hour production time Estimated Cost Cost Driver Use of Cost Driver Category Unit level Batch level Product level Facility level $ 322,000 650,000 775,000 624,000 $2,371,000 Number of units Number of setups Number of TV commercials Number of machine hours D: 17,000 units; G 29,000 units D: 104 setups G 146 setups D: 7: G: 18 D: 2,100 hours; G 2,700 hours Total The market price for office chairs comparable to Model Diamond is $121 and to Model Gold is $71. 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 163 units of Model Diamond per batch and 199 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. (For all requirements, round intermediate calculations and final answers to 2 decimal places.) Type of Product Cost per Unit a. Model Diamond Model Gold b. Model Diamond Model Gold

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