Umberger Manufacturing, Inc

Multiple Choice

Umberger Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
Inventory carrying costs are estimated to be 10% per year.
-As a result of the layout reorganization,reduced levels of work-in-process inventory are projected to decrease inventory carrying costs annually by:

A) $12,500.
B) $ 9,000.
C) $ 6,000.
D) $ 3,500.