Business, 08.02.2021 18:30 alexis3744

Quality Chairs Inc. (QC) manufactures chairs for industrial use. Laura Winters, the Vice President for Marketing at QC, concluded from market analysis that sales were dwindling for QC's standard three-foot chair due to aggressive pricing by competitors. QC's chairs sold for $650 whereas the competition's comparable chair was selling for $570. Winters determined that a price drop to $570 would be necessary to regain market share and reach a targeted annual sales level of 10,000 chairs. Cost data based on sales of 10,000 chairs:

Direct materials (board feet) 88,000 79,500 $1,250,000
Direct labor (hours) 71,350 73,775 875,000
Machine hours (hours) 11,400 11,250 250,000
Finishing and packing (hours) 6,500 6,400 125,000

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

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Quality Chairs Inc. (QC) manufactures chairs for industrial use. Laura Winters, the Vice President f...

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