Question 1: Cost Concepts (6 marks) A company is planning to replace an outdated piece of equipment with a more energy-efficient and environmental- friendly model. The new model can be purchased for $159,000 and would produce at the same optimum speed of 78 units/hour as the current model does. The new model would have a defect rate of only 2.25%, whereas the current model's defect rate is 3%. Defective units have no salvage value and are just thrown out. The current model requires 6 hours of maintenance for every 4300 units produced, while the new model requires only 5 hours of maintenance for every 5300 units. The maintenance cost for both models is/would be $100 per hour. The variable operating cost is $340 per hour for the existing model and would be $290 per hour for the new model. Due to obsolete parts, there is a sunk cost of $2700 for the current model. The completed product sells for is $150 per unit. If the company wants to do one more final run of 140,650 units, before decommissioning the current model, what would it cost per unit for this last production run? Show all your steps and rational. Question 1: Cost Concepts (6 marks) A company is planning to replace an outdated piece of equipment with a more energy-efficient and environmental- friendly model. The new model can be purchased for $159,000 and would produce at the same optimum speed of 78 units/hour as the current model does. The new model would have a defect rate of only 2.25%, whereas the current model's defect rate is 3%. Defective units have no salvage value and are just thrown out. The current model requires 6 hours of maintenance for every 4300 units produced, while the new model requires only 5 hours of maintenance for every 5300 units. The maintenance cost for both models is/would be $100 per hour. The variable operating cost is $340 per hour for the existing model and would be $290 per hour for the new model. Due to obsolete parts, there is a sunk cost of $2700 for the current model. The completed product sells for is $150 per unit. If the company wants to do one more final run of 140,650 units, before decommissioning the current model, what would it cost per unit for this last production run? Show all your steps and rational