Question
The Troy store of Henderson Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for
The Troy store of Henderson Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Henderson Mart has three product categories: soft drinks (35% of cost of goods sold (COGS]), fresh snacks (25% of COGS), and packaged food (40% of COGS). The following table shows the four activities that consume indirect resources at the Troy store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2018.
Requirement
What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2018?
What are the benefits of using a Kaizen approach to budgeting? What are the limitations of this approach, and how might Henderson Mart management overcome them? Print Done
Activity Ordering Delivery Shelf-stocking Customer support Cost Driver Number of purchase orders Number of deliveries Hours of stocking time Number of items sold January 2018 Budgeted Cost-Driver Rate $ 66 $ 75 $ 18.00 $ 0.20 January 2018 Budgeted Amount of Cost Driver Used Soft Drinks 15 12 17 4,000 Fresh Packaged Snacks Food 28 65 175 34,300 15 23 96 10,500
Step by Step Solution
3.41 Rating (173 Votes )
There are 3 Steps involved in it
Step: 1
ANSWER ATTACHED IMAGE Benefits It is a costreduction approach In this approach we interact with work...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started