Develop a strategic cost management plan for reducing production costs.

Cost Category	Current Costs ($)	Target Reduction (%)
Direct Materials	$500,000	10%
Direct Labor	$300,000	15%
Manufacturing Overhead	$200,000	12%
Total Production Cost	-	-

Requirements:

Calculate the target reduction in costs for each category.

Develop strategies for achieving cost reductions in direct materials, direct labor, and manufacturing overhead.

Evaluate the potential impact of these cost reductions on overall production costs and profitability.

Discuss the importance of strategic cost management in maintaining competitive advantage.