Power Cycle Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization: Before the change After the change Total annual sales $1.200.000 $1,600,000 Costs as percentage of sales: Direct materials 23% 20% Direct labor 9% 7% Manufacturing Support costs 18% 13% Work-in-process inventory $250,000 $180,000 Inventory carrying costs are estimated to be 10% per year. As a result of the layout reorganization, incremental manufacturing costs are projected to: O A. decrease by $33,000 annually. O B. decrease by $40,000 annually. O C. increase by $40,000 annually OD. increase by $168,000 annually