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E20-22 (STDS) IT production, relevant benefits, relevant costs. The Champion Hardware Company manufactures specialty brass door handles at its Lynchburg plant. Champion is considering mplementing

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E20-22 (STDS) IT production, relevant benefits, relevant costs. The Champion Hardware Company manufactures specialty brass door handles at its Lynchburg plant. Champion is considering mplementing a JIT production system. The following are the estimated costs and benefits of JIT production: Annual additional tooling costs would be $100,000. Average inventory would decline by 80% from the current level of $1,000,000. a. Inv is not part of the relevant cost Insurance, space, materials-handling, and setup costs, which currently total $300,000 annually, would decline by 25%. The emphasis on quality inherent in JIT production would reduce rework costs by 30%. Champion currently incurs $200,000 in annual rework costs. Improved product quality under JIT production would enable Champion to raise the price of its product by $4 per unit. Champion sells 40,000 units each year. champion's required rate of return on inventory investment is 15% per year. Required Calculate the net benefit or cost to champion if it adopts JIT production at the Lynchburg plant. What nonfinancial and qualitative factors should Champion consider when making the decision to adopt JIT production

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