Alexandria Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorgan Total annual sales Costs as percentage of sales: Direct materials Direct labor Manufacturing Support costs Work-in-process inventory O a. $3,750 O b. $5,500 O c. $4,400 O d. $1,100 Before the Change After the Change $250,000 $375,000 20% 8% 12% $50,000 17% 7% 6% $ 40,000 Inventory carrying costs are estimated to be 11% 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:
Alexandria Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorgan Total annual sales Costs as percentage of sales: Direct materials Direct labor Manufacturing Support costs Work-in-process inventory O a. $3,750 O b. $5,500 O c. $4,400 O d. $1,100 Before the Change After the Change $250,000 $375,000 20% 8% 12% $50,000 17% 7% 6% $ 40,000 Inventory carrying costs are estimated to be 11% 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:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Please help me with show all calculation thanku
Transcribed Image Text:Alexandria Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
O a. $3,750
O b. $5,500
O c. $4,400
Total annual sales
Costs as percentage of sales:
Direct materials
Direct labor
O d. $1,100
Manufacturing Support costs
Work-in-process inventory
Before the Change After the Change
$250,000
$375,000
20%
8%
12%
$50,000
Inventory carrying costs are estimated to be 11% 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:
17%
7%
6%
$ 40,000
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