The Troy store of Henderson Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous
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 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