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Question 4 (2 points) Seifert Company is considering reorganizing its plant into manufacturing cells to improve efficiency. The following estimates have been prepared to evaluate
Question 4 (2 points) Seifert Company is considering reorganizing its plant into manufacturing cells to improve efficiency. The following estimates have been prepared to evaluate the benefits of the reorganization: Before the After the reorganization reorganization Total annual $250,000 $375,000 sales Costs as a percentage of sales Direct 20% 17% materials Direct labor 8% 7% Manufacturing 12% 6% overhead Work in process $50,000 $40,000 inventory Inventory carrying costs are estimated to be 11% per year. As a result of switching to cellular manufacturing, total benefits are projected to increase annually by: OA) $111,400 OB) $113,600 OC) $136,400 OD) $138,600
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