Boris Company introduced JIT manufacturing last year and has prepared the following data to assess the benefits
Question:
Boris Company introduced JIT manufacturing last year and has prepared the following data to assess the benefits from the change:
Inventory financing costs are 12% per year. Support costs are based on a time-driven activity-based costing analysis. Estimate the total financial benefits that resulted from the switch to JIT manufacturing operations.
Transcribed Image Text:
AFTER THE CHANCE 25 days BEFORE THE CHANGE CATECORY 50 days Production cycle time Inventories Total sales Costs as percent of sales: Direct materials Direct labor Support $220,000 $40,000 $1,000,000 $1,500,000 25% 20% 20% 15% 27% 17%
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Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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