Question 23 Reilly 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 $1,200,000 $1,600,000 Costs as percentage of sales: Direct materials 23% 20% Direct labor 9% 7% Manufacturing Support costs 18% 13% Work-in-process inventory $250,000 $180,000 Inventory carrying costs are estimated to be 10% per year. After the change, direct labor costs as a percentage of sales are projected to decrease because: Select one: a. less work-in-process inventory needs to be moved from location to location. b. fewer employees are needed to produce a product due to the new work design. c. less supervisors are needed to oversee operations. d. All of the options are correct

Question 23 Reilly 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 $1,200,000 $1,600,000 Costs as percentage of sales: Direct materials 23% 20% Direct labor 9% 7% Manufacturing Support costs 18% 13% Work-in-process inventory $250,000 $180,000 Inventory carrying costs are estimated to be 10% per year. After the change, direct labor costs as a percentage of sales are projected to decrease because: Select one: a. less work-in-process inventory needs to be moved from location to location. b. fewer employees are needed to produce a product due to the new work design. c. less supervisors are needed to oversee operations. d. All of the options are correct

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 69C: Keep or Drop a Division Jan Shumard, president and general manager of Danbury Company, was concerned...

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