Quality Chairs Inc. (QC) manufactures chairs for industrial use. Laura Winters, the Vice President for Marketing at QC, concluded from market analysis that sales were dwindling for QC's standard three-foot chair due to aggressive pricing by competitors. QC's chairs sold for $550 whereas the competition's comparable chair was selling for $495. Winters determined that a price drop to $495 would be necessary to regain market share and reach a targeted annual sales level of 10,000 chairs. Cost data based on sales of 10,000 chairs:

	Budgeted Quantity			Actual Quantity			Actual Cost
Direct materials (board feet)		88,000			79,500		$	1,250,000
Direct labor (hours)		71,350			73,775			875,000
Machine hours (hours)		11,400			11,250			250,000
Finishing and packing (hours)		6,500			6,400			125,000

If the profit per unit is maintained, the target cost per unit is:

Multiple Choice

$250.

$205.

$105.

$195.

$300.