7. Steve Corporation is using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows: Sales (240,000 units) Less: Cost of goods sold Gross margin Operating expenses (includes $32,000 of fixed costs) Net income $360,000 240,000 120,000 96,000 $ 24,000 Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. Required: Prepare a kaizen-based budgeted income statement for March of 2018.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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