Price

Quantity

Cost per unit of output

Fabric

$16 per yard

0.75 yard per unit

$

12

per unit

Labor

$16 per DMLH

0.25 DMLH per unit

$

4

per unit

Dye*

$0.50 per ounce

6 ounces per unit

$

3

per unit

?*For colored? T-shirts only

Budgeted sales and selling price per unit are as? follows:

 

Budgeted Sales

Selling Price per Unit

White T-shirts

13,000 units

 

$

18

per T-shirt

Colored T-shirts

71,000 units

 

$

22

per T-shirt

Requirement 2. Assume AA

AA chooses to be environmentally responsible regardless of? cost, and it switches to the new dye. The production manager suggests trying Kaizen costing. If USA can reduce fabric and labor costs each by 1 %

1% per? month, by how much will overall costs decrease at the end of 12? months?

First calculate the fabric costs resulting from the Kaizen? improvements, then in the next step calculate the labor costs. ?(Round all intermediary calculations and the amounts you input in the cells to the nearest? dollar.)