nstant Image Inc. manufactures color laser printers. Model J20 presently sells for $600 and has a product cost of $480, as follows:

Direct materials	$350
Direct labor	90
Factory overhead	40
Total	$480

It is estimated that the competitive selling price for color laser printers of this type will drop to $570 next year. Instant Image has established a target cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost-reduction ideas:

1. Purchase a plastic printer cover with snap-on assembly rather than with screws. This will reduce the amount of direct labor by 9 minutes per unit.
2. Add an inspection step that will add 6 minutes per unit of direct labor but reduce the materials cost by $12 per unit.
3. Decrease the cycle time of the injection molding machine from 4 minutes to 3 minutes per part. Thirty percent of the direct labor and 40% of the factory overhead are related to running injection molding machines.

The direct labor rate is $38 per hour.

a. Determine the target cost for Model J20 assuming that the historical markup on product cost and selling price is maintained. $fill in the blank 1

b. Determine the required cost reduction. $fill in the blank 2

c. Evaluate the three engineering improvements together to determine whether the required cost reduction (drift) can be achieved. Do not round interim calculations but round your final answers to two decimal places.

1. Direct labor reduction	$fill in the blank 3	per unit
2. Additional inspection	fill in the blank 4
3. Injection molding productivity improvement	fill in the blank 5
Total savings	$fill in the blank 6	per unit