Quality Industries manufactures large workbenches for industrial use. Yewell Hartnet, the Vice President for marketing...
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Quality Industries manufactures large workbenches for industrial use. Yewell Hartnet, the Vice President for marketing at Quality Industries, concluded from market analysis that sales were dwindling for Quality's workbenches due to aggressive pricing by competitors. Quality's workbench sells for $1,140 whereas the competition's comparable workbench sells for $1,060. Yewell determined that a price drop to $1,060 would be necessary to retain market share and annual sales of 13,000 tables. Cost data based on sales of 13,000 workbenches: Budgeted Quantity Actual Quantity Actual Cost Direct materials (pounds) 175,000 168,000 $3,450,000 Direct labor (hours) 72,800 71,500 825,000 Machine setups (no. of setups) 900 880 250,000 Mechanical assembly (machine hours) 273,000 281,250 3,750,000 In order to reduce costs so as to reach the desired target cost, Quality Industries should also focus on reducing the cost of:
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