Rooney Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Rooney 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	$	20.2		$	9.0
Direct labor		28.4			11.0

Category	Estimated Cost					Cost Driver	Use of Cost Driver
Unit level			24,990			Number of units	ZM: 2,400 units; DS: 9,500 units
Batch level			43,680			Number of setups	ZM: 24 setups; DS: 24 setups
Product level			88,750			Number of TV commercials	ZM: 13; DS: 12
Facility level			228,000			Number of machine hours	ZM: 400 hours; DS: 800 hours
Total		$	385,420

Rooneys facility has the capacity to operate 3,600 machine hours per month.

A. Compute the cost per unit for each product.

Type of Product	Direct Materials	+	Direct Labor	+	Allocated Overhead	=	Total
Model ZM		+		+		=	$0.00
Model DS		+		+		=	0.00

B. The current market price for products comparable to Model ZM is $120 and for DS is $87. If Rooney sold all of its products at the market prices, what was its profit or loss for the previous month?

		Amount
Model ZM	Profit
Model DS	Profit

C. A market expert believes that Rooney can sell as many cameras as it can produce by pricing Model ZM at $115 and Model DS at $40. Rooney 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?

	Model ZM	Model DS
Target cost / unit