1. Toyota Motor Corporation is enhancing manufacturing efficiency at its assembly line operations. The current COGS structure includes direct materials, direct labor, and factory overhead costs. For the latest production batch:

Requirements:

• Calculate the COGS using the formula: COGS = Direct Materials + Direct Labor + Factory Overhead.
• Provide a breakdown in a COGS table showing the costs for each component.
• Recommend strategies to reduce COGS, such as optimizing production schedules and reducing waste.
• Justify how reducing COGS aligns with Lean manufacturing principles.
• Prepare a numerical example with hypothetical values demonstrating the calculation of COGS and potential savings.

COGS Table:

Category	Amount ($)
Direct Materials	X
Direct Labor	Y
Factory Overhead	Z
Total COGS	X + Y + Z

Numerical Example:

• Direct Materials: $500,000
• Direct Labor: $300,000
• Factory Overhead: $200,000
• COGS = $500,000 + $300,000 + $200,000 = $1,000,000

Toyota plans to reduce COGS by 10% through efficiency improvements, potentially saving $100,000 annually.