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Campbell Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Campbell 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 $ 20.20 $ 7.00 Direct labor 28.40 9.00 Category Estimated Cost Cost Driver Use of Cost Driver Unit level $ 25,960 Number of units ZM: 2,400 units; DS: 9,400 units Batch level 47,320 Number of setups ZM: 26 setups; DS: 26 setups Product level 90,000 Number of TV commercials ZM: 15; DS: 10 Facility level 180,000 Number of machine hours ZM: 300 hours; DS: 600 hours Total $ 343,280 Campbells facility has the capacity to operate 2,700 machine hours per month. Required

A: Compute the cost per unit for each product.

B: The current market price for products comparable to Model ZM is $118 and for DS is $74. If Campbell sold all of its products at the market prices, what was its profit or loss for the previous month?

C. A market expert believes that Campbell can sell as many cameras as it can produce by pricing Model ZM at $113 and Model DS at $33. Campbell 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?

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