Many Firms Are Moving Toward Flexible Manufacturing Systems and Adopting

Many firms are moving toward flexible manufacturing systems and adopting the just-in-time (JIT)philosophy.
Required:
A.How is cost behavior altered in the typical flexible manufacturing environment as compared to a traditional manufacturing system? What is the impact on the break-even point? Explain.
A.Variable manufacturing costs typically decrease in a flexible manufacturing environment and total fixed costs increase.Automation (along with accompanying depreciation,lease,and maintenance costs)and fewer people normally account for this change.The break-even point,as a result,often increases.
B.One of the assumptions underlying cost-volume profit analysis is that sales volume and production volume are equal.Stated another way,inventories are assumed to remain constant.Is this assumption likely to be violated under an ongoing JIT philosophy? Explain.
B.When a company first changes to JIT,there is likely to be a drop-off in inventories.However,the assumption of no significant change in inventories will probably not be violated for an ongoing JIT user.Any accompanying level changes are not likely to be significant relative to the volume of production and sales.