Pete's Cola Company Is Investigating the Possibility of Adopting a Lean

Multiple Choice

Pete's Cola Company is investigating the possibility of adopting a lean thinking philosophy throughout their organization. Estimated costs to set up the computer system are $1,660,000; training employees in lean operations is estimated to cost $175,000; and the general expenses of establishing the program are estimated at $313,000. The estimated value of the potential savings is $1,950,000. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

A) Costs outweigh benefits by $115,000.
B) Benefits outweigh costs by $115,000.
C) Costs outweigh benefits by $198,000.
D) Benefits outweigh costs by $198,000.