Target Costing and Downsizing. Blossom Enterprises manufactures mah-jongg sets that sell for \(\$ 100\) per set. In 1997, the following manufacturing costs were incurred to produce 12,000 sets:

In addition, Blossom incurred \(\$ 145,000\) in marketing and administrative expenses (all fixed) during 1997.
These sales and cost figures are expected to be the same during 1998. However, to achieve a 1999 sales level of just 11,000 sets, the increasing competition from Marcy's Gaming Corporation will necessitate a price reduction from \(\$ 100\) to \(\$ 90\). To maintain the same net profit margin percentage, Blossom plans to produce 11,000 sets by downsizing the direct labor workforce in 1999 .
\section*{Required:}
1. What is Blossom's target cost for 1999?
2. Compute the planned percentage reduction of the direct labor workforce for 1999 .

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Direct materials. Direct labor Energy costs-variable Energy costs-fixed.... Other fixed overhead $120,000 210,000 144,000 130,000 175,000 Other variable overhead 96,000 $875,000