Carey 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

Required:
a. Why do the layout reorganization estimates include
1. a decrease in work-in-process inventory?
2.a decrease in direct material costs as a percentage of sales?
3.an increase in sales?
b. As a result of the layout reorganization,what amount of annual change is projected
1.from carrying reduced levels of work-in-process inventory?
2.for incremental manufacturing costs?
3.in total benefits?

Question

Carey 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
  
Required:
a. Why do the layout reorganization estimates include
1. a decrease in work-in-process inventory?
2.a decrease in direct material costs as a percentage of sales?
3.an increase in sales?
b. As a result of the layout reorganization,what amount of annual change is projected
1.from carrying reduced levels of work-in-process inventory?
2.for incremental manufacturing costs?
3.in total benefits?

Quizplus · Accepted Answer

The Answer of Carey 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
  
Required:
a. Why do the layout reorganization estimates include
1. a decrease in work-in-process inventory?
2.a decrease in direct material costs as a percentage of sales?
3.an increase in sales?
b. As a result of the layout reorganization,what amount of annual change is projected
1.from carrying reduced levels of work-in-process inventory?
2.for incremental manufacturing costs?
3.in total benefits?