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Author Question: The Controller of Nip-it-in-the-Bud Inc. has studied the possibility of implementing a JIT ... (Read 208 times)

a0266361136

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on: Mar 6, 2021

Question 1

The demand-pull feature of JIT production systems results in close coordination among workstations and smooths the flow of goods.
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Question 2

The Controller of Nip-it-in-the-Bud Inc. has studied the possibility of implementing a JIT production system.  The annual incremental retooling costs of the JIT system is projected to be about $67,000 however, the new system will lower insurance costs by $10,000 and storage costs will drop by $20,000 a year as the company will be able to reuse warehouse space for other strategic purposes.  In addition, material handling costs will drop by $10,000 a year and because of a resulting increase in quality and faster delivery, the company's contribution margin on the product will increase by $2.00 on annual sales of 20,000 units.  
Required: 
Calculate the net incremental benefit of the JIT system implementation.
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by a0266361136 on Mar 6, 2021

AISCAMPING

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Reply #1 on: Mar 6, 2021
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a0266361136

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Reply 2 on: Mar 6, 2021
Wow, this really help

alvinum

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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