Exercise 17-51 Relevant Cost Analysis-Conversion to JIT; Spreadsheet Application (LO 17-1, 17-5) As part of its commitment to quality, the J.J. Borden manufacturing company is proposing to introduce just-in-time (UMT) production methods. Managers of the company have an intuitive feel regarding the financial benefits associated with a change to JIT, but they would like to have some data to inform their decision making in this regard. You are provided with the following data: Existing After Situation Adopting IT Manufacturing costs as percentage of sales: Product-level support 11% Variable manufacturing overhead Direct materials 31 Direct manufacturing labor 16 Item 29 11 21 23 Other financial data: Sales revenue Inventory of WIP $ 1,385,000 215.000 $ 1,720,000 37,000 Other data: Manufacturing cycle tine Inventory financing costs (per annum) 60 days 10% 30 days 10% Required: As the management accountant for the company, prepare an estimate the financial benefits associated with the adoption of JIT Specifically, what is the estimated change in annual operating income attributable to the JIT implementation? He Inventory of WIP 215,000 37,909 Other data: Manufacturing cycle time Inventory financing costs (per annum) 60 days 10% 30 days 18% Required: As the management accountant for the company, prepare an estimate the financial benefits associated with the adoptic Specifically, what is the estimated change in annual operating income attributable to the JIT implementation? Items Current Situation After JIT Change Less: Costs Operating profit