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I need the incorrect numbers corrected please As part of its commitment to quality, the J. J. Borden manufacturing company is proposing to introduce just-in-time
I need the incorrect numbers corrected please
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: Existing Situation After Adopting JIT Item Manufacturing costs as percentage of sales: Product-level support Variable manufacturing overhead Direct materials Direct manufacturing labor 13% 29 31 5% 21 15 Other financial data: Sales revenue Inventory of WIP $1,420,000 250,000 $1,790,000 44,000 Otherdata: Manufacturing cycle time Inventory financing costs (per annum) 60 days 10% 30 days 10% Requlred: 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? Answer is not complete. Situation After JIT $1.420,000$1,790,00S(370,000) Change Sales Less: Costs Product-level support Variable manufacturing overhead Direct materials Direct manufacturing labor Inventory financing costs 184,600 411,800 440,200 312,400 417 89,500 198,900 375,900 268,500 114 95,100 214,900 84,300 43,900 3,748 Operating profit 5 71,000 5 792,000
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