In Blayney Scott and his wife Almeda started a small company in Victoria, British Columbia, Canada that pioneered the use of plastics in the manufacturing of marine products. Scotty Manufacturing has evolved to produce thousands of products under the Scotty Trademark which are sold into the fishing, marine, outdoor and firefighting industries worldwide. To manage production costs, Scotty is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production:

Annual additional tooling costs would be $

Annual inventory would decline by percent from the current level of $

Insurance, material handling, and setup costs which currently total $ annually, would decline by

Rework would be reduced by percent. Scotty currently incurs $ in annual rework costs.

Improved product quality under JIT production would enable Scotty to raise the price of its products by $ per unit. Scotty sells units per year.

Scotty\'s required rate of return is percent per year. To manage production costs, Scotty Manufacturing is considering implementing a JIT production system.

Required: What are the total net relevant costs including any revenues under the proposed JIT production system? mark for correct multichoice answer and other marks for showing correct work in the workspace question provided