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dimaraw [331]
3 years ago
13

Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018

is as follows: Sales (168,000 units) $1,010,000 Less: Cost of goods sold 690,000 Gross margin 320,000 Operating expenses 400,000 (includes $55,000 of fixed costs) Operating income -$80,000 Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. What is the budgeted operating income for March 2018
Business
1 answer:
Rama09 [41]3 years ago
6 0

Answer:

February Kaizen Budgeted Operating income -$ 69,650

March Kaizen Budgeted Operating income-$ 59,405.5

Explanation:

The Kaizen costing primarily focuses on production processes and in it the cost reductions are obtained through increasing efficiency.

Sales (168,000 units) $1,010,000

Less: Cost of goods sold 690,000

Gross margin 320,000

Operating expenses 400,000 (includes $55,000 of fixed costs)

Operating income -$80,000

<u>Calculations For February</u>

Decrease by 1% of COGS  $ 690,000= $ 690,000-$6900=$ 683,100

Decrease by 1% of Variable Expenses $ 345000= $ 345000-3450= $ 341550

Budgeted Operating Income Under Kaizen Costing For February

Sales (168,000 units) $1,010,000

Less: Cost of goods sold 683,100

Gross margin 326,900

Operating expenses

Variable Expenses $ 341550

Fixed Costs $55,000

Operating income -$ 69,650

<u>Calculations For March</u>

Decrease by 1% of COGS  $ 683,100= $ 683,100-$6831=$ 676,269

Decrease by 1% of Variable Expenses $ 341 550= $ 341550-3415.5= $ 338134.5

Budgeted Operating Income Under Kaizen Costing For March

Sales (168,000 units) $1,010,000

Less: Cost of goods sold $ 676,269

Gross margin 333,731

Operating expenses

Variable Expenses $ 338134.5

Fixed Costs $55,000

Operating income -$ 59,405.5

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Some of the options he has would include:

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4 0
2 years ago
Suppose your expenses for this term are as follows: tuition: $12,000, room and board: $6,500, books 4) and other educational sup
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Answer:

The opportunity cost is $24,000

Explanation:

Giving the following information:

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Further, during the term, you can only work part-time and earn $3,500 instead of your full-time salary of $14,000.

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3 years ago
TB MC Qu. 7-77 Corbel Corporation has two divisions: Division A and ... Corbel Corporation has two divisions: Division A and Div
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Answer:

Corbel Corporation's common fixed cost  is $41,650

Explanation:

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($231,000 * 35%)

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3 0
3 years ago
Suppose that Sheldon and Leonard can either run errands or wash dishes. The time it takes each of them to accomplish one of thes
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Answer: Sheldon focuses or specialize on running errands and Leonard in washing dishes;

they trade at 1 errand run per 20 dishes washed

Explanation:

Sheldon focuses or specialize on running errands and Leonard in washing dishes; thus this the individual specialization

they trade at 1 errand run per 20 dishes washed this is the terms of trade they both can agree on.

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Answer:

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