Power Cycle Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Power Cycle Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
| Before the change | After the change | |
| Total annual sales | $1,200,000 | $1,600,000 |
| Costs as percentage of sales: |
|
|
| Direct materials | 23% | 20% |
| Direct labor | 9% | 7% |
| Manufacturing Support costs | 18% | 13% |
| Work-in-process inventory | $250,000 | $180,000 |
Inventory carrying costs are estimated to be 10% per year.
As a result of the layout reorganization, reduced levels of work-in-process inventory are projected to decrease inventory carrying costs annually by: $7,000
As a result of switching to a cellular manufacturing operation, total benefits are projected to increase annually by:
a.
$433,000
b.
$400,000
c.
$367,000
d.
$353,000
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.