Schaffer Furniture Corporation make and Comfort for casual dining, at its si a recession, Ken Schaffer, the pres business as market prices fall. cost data for analysis. corporation makes two types of dining tables, Elegance for formal dining ning, at its single factory. With the economy beginning to experience Ter, the president, is concerned about whether the company can stay in ket prices fall. At Mr. Schaffer's request, Amy Chang, the controller, prepared Direct Cost Elegance (E) Comfort (C) Direct materials $60 per unit Direct labor $36 per hour x 1.5 hours production time $33 per unit $36 per hour x 1 hour production time Category Estimated Cost Cost Driver Use of Cost Driver E: 2,500 units: C: 7,500 units E: 23 setups: C: 27 setups Product $120,000 Number of units inspection Machine setups 75,000 Number of setups Product 210,000 Number of TV dvertising commercials acility 405,000 Number of epreciation machine hours $810,000 Required: A. Compute the cost per unit for each product. C: 9 E: 5,000 hours; C: 5,000 hours B. If management wants to make 30 percent of cost as a profit margin for Elegance, what price should the company set? . Assume the market price for Elegance is set at $300 by competition. What is the roduction cost per unit for Elegance that would achieve the 30% of cost as the profit margin? Suggest specific ways they may cut costs to achieve this goal. 145