Nyborg Supermarkets has a kaizen (continuous improvement) approach to budgeting monthly activity area costs for each month of 2015. February's budgeted cost driver rate is 0.998 times the budgeted January 2015 rate. March's budgeted cost driver rate is 0.998 times the budgeted February 2015 rate, and so on. Assume that March 2015 has the same budgeted amount of cost drivers used as did January 2015.
Required
1 What is the total budgeted cost for each activity area in March 2015?
2 What are the benefits of Nyborg Supermarkets adopting a kaizen budgeting approach? What are the limitations?