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 Total annual sales $500,000 Costs as percentage of sales: Direct materials 20% Direct labor 8% Support costs 12% Work-in-process inventory $100,000 After the change, Sales revenue increases by 50%; COGS decreases by 25% over the % of sales prior to change; WIP decreases by 20% of the value of WIP prior to the change. Inventory carrying costs are estimated to be 11% per year. Q28. As a result of switching to a cellular manufacturing operation, total benefits are projected to increase by: [hint: compare (gross margin - carrying cost of inventory) before & after the change). $222,800 O $227,200 O $272,800 O $277,200