In the press release, “Target Corporation Announces Updated 2022 Plan Focused on Inventory Optimization,” Target identifies several changes it will implement to increase profits. Five of these changes are listed below. For each of the changes, labeled 1-5, identify the FIRST budget in the Master Budget that you would need to adjust to record the change. Would you increase or decrease the budgeted amount? A brief explanation is required. I have done an example for you. The master budget order is shown on the last page.

Example: Additional mark-downs on current inventory

Budget: Sales Budget

Increase or decrease: Decrease

Explanation: Mark-downs will decrease sales prices so reduce the sales budget.

Now you do 1-5:

1. Addition of incremental holding capacity near U.S. ports. Assume the space will be rented.

Budget ________________________

Increase or decrease____________________

Explanation:

2. Pricing actions to address the impact of unusually high transportation and fuel costs.

Budget ________________________

Increase or decrease____________________

Explanation:

3. Working with suppliers to shorten distances and lead times in the supply chain. Assume this will decrease inventory costs, not necessarily passed on to the consumer.

Budget ________________________

Increase or decrease____________________

Explanation:

4. Reducing costs while preserving a strong guest experience

Budget ________________________

Increase or decrease____________________

Explanation:

5. Adding five distribution centers over the next two fiscal years.

Budget ________________________

Increase or decrease____________________

Explanation:

Note: the Budgeted income statement and balance sheet will never be the first budget to adjust as all the numbers for these statements come from other budget schedules.

Answer rating: 100% (QA)

Solution 1 Expense Budget Increase Since we need to spend more on ... View the full answer