Laser Cast, Inc., manufactures color laser printers. Model J20presently sells for $400 and has a total product cost of $320, asfollows:

Direct materials	$230
Direct labor	60
Factory overhead	30
Total	$320

It is estimated that the competitive selling price for colorlaser printers of this type will drop to $380 next year. Laser Casthas established a target cost to maintain itshistorical markup percentage on product cost. Engineershave provided the following cost reduction ideas:

Purchase a plastic printer cover with snap-on assembly, ratherthan with screws. This will reduce the amount of direct labor by 9minutes per unit.

Add an inspection step that will add six minutes per unit ofdirect labor but reduce the materials cost by $8 per unit.

Decrease the cycle time of the injection molding machine fromfour minutes to three minutes per part. Thirty percent of thedirect labor and 40% of the factory overhead are related to runninginjection molding machines.

The direct labor rate is $25 per hour.

a. Determine the target cost for ModelJ20 assuming that the historical markup on product cost and sellingprice is maintained. Round your final answer to two decimalplaces.
$

b. Determine the required cost reduction.Enter as a positive number. Round your final answer to two decimalplaces.
$

c. Evaluate the three engineeringimprovements together to determine if the required cost reduction(drift) can be achieved. Enter all amounts as positive numbers. Donot round interim calculations but round your final answers to twodecimal places.

1. Direct labor reduction	$
2. Additional inspection	$
3. Injection molding productivityimprovement	$
Total savings	$