Perez Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Perez uses an activity-based costing system. The following are the relevant cost data for the previous month:

Direct Cost per Unit	Model ZM			Model DS
Direct materials	$	20.9		$	7.0
Direct labor		29.8			9.0

Category	Estimated Cost					Cost Driver	Use of Cost Driver
Unit level		$	25,960			Number of units	ZM: 2,350 units; DS: 9,450 units
Batch level			50,960			Number of setups	ZM: 26 setups; DS: 26 setups
Product level			90,000			Number of TV commercials	ZM: 14; DS: 11
Facility level			180,000			Number of machine hours	ZM: 300 hours; DS: 600 hours
Total		$	346,920

Perezs facility has the capacity to operate 2,700 machine hours per month.

Required

1. Compute the cost per unit for each product.

2. The current market price for products comparable to Model ZM is $119 and for DS is $66. If Perez sold all of its products at the market prices, what was its profit or loss for the previous month?

3. A market expert believes that Perez can sell as many cameras as it can produce by pricing Model ZM at $114 and Model DS at $34. Perez would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product?