US Apparel $($USA$)$ manufactures plain white and solid$-$colored T$-$shirts. Budgeted inputs and alternative dye information include the following:

$($Click the icon to view the budgeted input data.$)$

$($i$.)($Click the icon to view alternative dye information.$)$

Read the requirements.

Requirement $2.$ Assume USA chooses to be environmentally responsible regardless of cost$,$ and it switches to the new dye. The production manager suggests

trying Kaizen costing. If USA can reduce fabric and labor costs each by $1\%$ per month, by how much will overall costs decrease at the end of $12$ months?

First calculate the fabric costs resulting from the Kaizen improvements, then in the next step calculate the labor costs. $($Round all intermediary calculations and

the amounts you input in the cells to the nearest dollar.$)$

Now determine how much overall costs will decrease at the end of $12$ months.

Total fabric and labor costs before Kaizen improvements

Total fabric and labor costs after Kaizen improvements

Cost decrease resulting from Kaizen improvements

The net cost of combining the environmentally friendly dye and the Kaizen improvements is

The net cost of combining the environmentally friendly dye and the Kaizen improvements is

the fine. Therefore, USA

combine the

environmentally friendly dye and the Kaizen improvements.

Requirement $3.$ Refer to requirement $2.$ How could the reduction in material and labor costs be accomplished? Are there any problems with this plan?

Reduction in materials can be accomplished by

$.$ Reduction in direct labor can be

accomplished by

$.$ USA must be careful that

Data table

$$

Price

Quantity

Cost per unit of output

Fabric

$$8$ per yard

$0\mathrm{.}75$ yard per unit

$$6$

per unit

Labor

$$16$ per DMLH

$0\mathrm{.}25$ DMLH per unit

$$4$

per unit

Dye$*$

$$0\mathrm{.}50$ per ounce

$4$ ounces per unit

$$2$

per unit

$*$For colored$$ T$-$shirts only

Budgeted sales and selling price per unit are as$$ follows:

$$

Budgeted Sales

Selling Price per Unit

White T$-$shirts

$10,000$ units

$$

$$12$

per T$-$shirt

Colored T$-$shirts

$50,000$ units

$$

$$15$ per T$-$shirt