Sherry and John Enterprises are using the kaizen approach to budgeting for 2018.The budgeted income statement for January 2018 is as follows:

Under the kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
What is budgeted cost of goods sold for March 2018?

Question

Sherry and John Enterprises are using the kaizen approach to budgeting for 2018.The budgeted income statement for January 2018 is as follows:

Under the kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
What is budgeted cost of goods sold for March 2018?

Quizplus · Accepted Answer

Cost of goods sold in February is $643,500 ($650,000 × 0.99)and March = $637,065 ($643,500 × 0.99).

Sherry and John Enterprises Are Using the Kaizen Approach to Budgeting