P21-29. Continuous Improvement (Kaizen) Costing Samira Company does contract manufacturing of compact video cameras. At its Pacific plant, cost control has become a concem of management. The actual costs per unit for the previous two years were as follows: Year 1 Year 2 Direct materials Plastic case. . . . .. $ 5.10 $ 4.75 Lens set. . . . .. .. 12:00 10.90 Electrical component set. . 8.30 7.00 10.50 10.05 Direct labor. . . ..... . .... ...... 48.00 (1.6 hours) 45.00 (1.5 hours) Indirect manufacturing costs Variable. . ... .. 5.60 5.00 Fixed. . . . . 16.00 (100,000 12.75 (120.000 unit base) unit base) The company manufactures all of the camera components except the lens sets, which it purchases from several vendors. The company has used target costing in the past but has not been able to meet the very competitive global pricing. Beginning in Year 2, the company implemented a continuous improvement program that requires cost reduction targets. Required a. If continuous improvement (Kaizen) costing sets a target of a 10% reduction of the first year cost base. how successful was the company in meeting the per unit cost reduction targets in the second year? Support your answer with appropriate computations, b. Evaluate and discuss Samira's use of Kaizen costing