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:

Direct materials

Direct labor

Machine setups

Mechanical assembly