Stark Company is developing its budgets for 2013 and for the first time will use the Kaizen approach. The initial 2013 income statement, based on static data from 2012 is as follows:
Operating expenses (includes
Selling prices for 2013 are expected to increase by 6 percent, and sales volume in units will decrease by 10 percent. The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit. Other than amortization, all other operating costs are expected to decline by 5 percent.
Required:
Prepare a Kaizen-based budgeted income statement for 2013.

Question

Stark Company is developing its budgets for 2013 and for the first time will use the Kaizen approach. The initial 2013 income statement, based on static data from 2012 is as follows:
  Operating expenses (includes
  Selling prices for 2013 are expected to increase by 6 percent, and sales volume in units will decrease by 10 percent. The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit. Other than amortization, all other operating costs are expected to decline by 5 percent.
Required:
Prepare a Kaizen-based budgeted income statement for 2013.

Quizplus · Accepted Answer

The Answer of Stark Company is developing its budgets for 2013 and for the first time will use the Kaizen approach. The initial 2013 income statement, based on static data from 2012 is as follows:
  Operating expenses (includes
  Selling prices for 2013 are expected to increase by 6 percent, and sales volume in units will decrease by 10 percent. The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit. Other than amortization, all other operating costs are expected to decline by 5 percent.
Required:
Prepare a Kaizen-based budgeted income statement for 2013.

Stark Company Is Developing Its Budgets for 2013 and for the First