Question
Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
Vander Belt 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 | $250,000 | $375,000 |
Costs as percentage of sales: | ||
Direct materials | 20% | 17% |
Direct labor | 8% | 7% |
Manufacturing Support costs | 12% | 6% |
Workinprocess inventory | $50,000 | $ 40,000 |
Inventory carrying costs are estimated to be 11% per year.
After the change, sales are projected to increase because:
Question content area bottom
Part 1
A.
of higher sales prices.
B.
of the ability to process larger batch sizes.
C.
of shorter delivery lead times.
D.
All of the above are correct.
Vander Belt 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 | $250,000 | $375,000 |
Costs as percentage of sales: | ||
Direct materials | 20% | 17% |
Direct labor | 8% | 7% |
Manufacturing Support costs | 12% | 6% |
Workinprocess inventory | $50,000 | $ 40,000 |
Inventory carrying costs are estimated to be 11% per year.
After the change, sales are projected to increase because:
Question content area bottom
Part 1
A.
of higher sales prices.
B.
of the ability to process larger batch sizes.
C.
of shorter delivery lead times.
D.
All of the above are correct.
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