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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
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 protect its market share and maintain an annual sales level of 13,000 workbenches. Cost data based on sales of 13,000 workbenches: Direct materials (pounds) Direct labor (hours) Machine setups (no. of setups) Mechanical assembly (machine hours) Budgeted Quantity 175,000 72,800 900 273,000 Actual Quantity 168,000 71,500 880 281,250 Actual Cost $3,450,000 825,000 250,000 3,750,000 If the profit per unit is maintained, the target cost per unit is (rounded to the nearest whole dollar)
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