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The Heritage Hardware Company manufactures specialty brass door handles at its Halifax plant. Heritage is considering implementing a JIT production system. The following are the
The Heritage Hardware Company manufactures specialty brass door handles at its Halifax plant. Heritage is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: (Click the icon to view the estimated costs and benefits.) Heritage's required rate of return on inventory investment is 20% per year. Required Requirement 1. Calculate the net benefit or cost to Heritage if it adopts JIT production at the Halifax plant. Fill in the table below showing the relevant costs under current production system and under the JIT system. (Use parentheses or a minus sign to indicate inflows. Leave unused cells blank, do not enter "O". Round your answers to the nearest whole dollar.) Annual Relevant Costs of Current Production System and JIT Production System for Heritage Hardware Company Relevant Costs under Current Production Relevant Costs under JIT Relevant Items System Production System Annual tooling costs Required return on investment: Average inventory per year Insurance, space, materials handling, and setup costs Rework costs Incremental revenues from higher selling prices Total net incremental costs The Heritage Hardware Company manufactures specialty brass door handles at its Halifax plant. Heritage is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: (Click the icon to view the estimated costs and benefits.) Heritage's required rate of return on inventory investment is 20% per year. Required Requirement 1. Calculate the net benefit or cost to Heritage if it adopts JIT production at the Halifax plant. Fill in the table below showing the relevant costs under current production system and under the JIT system. (Use parentheses or a minus sign to indicate inflows. Leave unused cells blank, do not enter "O". Round your answers to the nearest whole dollar.) Annual Relevant Costs of Current Production System and JIT Production System for Heritage Hardware Company Relevant Costs under Current Production Relevant Costs under JIT Relevant Items System Production System Annual tooling costs Required return on investment: Average inventory per year Insurance, space, materials handling, and setup costs Rework costs Incremental revenues from higher selling prices Total net incremental costs
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