Carey Manufacturing,Inc

Essay

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?