Float Incorporated manufactures a wide variety of parts for recreational boating, including boat engines. The component is purchased by OEM (Original Equipment Manufacturers) such as Mercury and Honda, for use in the larger and more powerful outboards. The units sell for $820, and sales volume averages 32,800 units per year. Recently, Float's major competitor lowered the price of the equivalent part to $670. The market was very competitive, and Float realized it had to meet the new price or lose significant market share. The controller assembled the following data for the most recent year: Cost and Usage for Production of 32,800 Units Materials Direct labor Indirect labor Inspection (hours) Materials handling (number of purchases) Machine setups Returns and rework (number of times) Total Standard Cost Actual Quantity Actual Cost $ 6,664,000 $ 7,144,000 2,280,000 2,184,000 3,272,000 3,400 73,400 5,000 3,080,000 550,000 401,900 1,505,000 860 96,700 $ 14,961,600