As part of its commitment to quality, the J. J. Borden manufacturing company is proposing to introduce just-in-time (JIT) production methods. Managers of the company have an intuitive feel regarding the financial benefits associated with a change to JIT, but they would like to have some data to inform their decision making in this regard. You are provided with the following data:

ItemExisting

SituationAfter

Adopting JITManufacturing costs as percentage of sales:Product-level support13%4%Variable manufacturing overhead2911Direct materials3121Direct manufacturing labor2013Other financial data:Sales revenue$1,355,000$1,660,000Inventory of WIP185,00031,000Other data:Manufacturing cycle time60days30daysInventory financing costs (per annum)10%10%

Required:

As the management accountant for the company, prepar an estimate the financial benefits associated with the adoption of JIT. Specifically, what is the estimated change in annual operating income attributable to the JIT implementation?

Required: As the management accountant for the company, prepare an estimate the financial benefits associated with the adoption of JIT. Specifically, what is the estimated change in annual operating income attributable to the JIT implementation? Less: Costs Operating prot As part of its commitment to quality, the J. J. Borden manufacturing company is proposing to introducejust-invtime (JIT) production methods. Managers of the company have an intuitive feel regarding the nancial benets associated with a change to JIT, but they would like to have some data to inform their decision making in this regard. You are provided with the following data: Existing After Item Situation Adopting JIT Manufacturing costs as percentage of sales: Product-level support 13% 4% Variable manufacturing overhead 29 11 Direct materials 31 21 Direct manufacturing labor 20 13 other financial data: Sales revenue $1,355,000 $1,660,000 Inventory of WIP 185,000 31,000 other data: Manufacturing cycle time 60days 30days Inventory financing costs (per annum) 10% 10% [ Required: As the management accountant for the compa ny, prepare an estimate the financial benefits associated with the adoption of JIT. Specifically, what is the estimated change in annual operating income attributable to the JIT implementation