Nyborg Supermarkets has a kaizen (continuous improvement) approach to budgeting monthly activity area costs for each month of 2022. February’s budgeted cost driver rate is 0.998 times the budgeted January 2022 rate. March’s budgeted cost driver rate is 0.998 times the budgeted February 2022 rate, and so on. Assume that March 2022 has the same budgeted amount of cost drivers used as did January 2022.

Required

1 What is the total budgeted cost for each activity area in March 2022?
2 What are the benefits of Nyborg Supermarkets adopting a kaizen budgeting approach? What are the limitations?