Tool Industries manufactures large workbenches for industrial use. Sam Hartnet, the Vice President for marketing at Tool Industries, concluded from market analysis that sales were dwindling for Tool's workbenches due to aggressive pricing by competitors. Tool's workbench sells for $$1,140$ whereas the competition's comparable workbench sells for $$1,060.$ Sam determined that a price drop to $$1,060$ would be necessary to retain market share and annual sales of $13,000$ workbenches.

Cost data based on sales of $13,000$ workbenches:

Budgeted Quantity Actual Quantity Actual Cost

Direct materials $($pounds$)175,000168,000$ $ $3,450,000$

Direct labor $($hours$)72,80071,500825,000$

Machine setups $($number of setups$)900880250,000$

Mechanical assembly $($machine hours$)273,000281,2503,750,000$

In order to reduce costs so as to reach the desired target cost, Tool Industries should also focus on reducing the cost of:

Question $1$ options:

Direct materials

Direct labor

Machine setups

Mechanical assembly

All of these answer choices are correct