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sehrish bashir 3. The Bethel store of Family Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2021. Family 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 Bethel store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2021. (Click the icon to view the four activities and their cost data.) (Click the icon to view additional cost driver information.) Read the requirements".

sehrish bashir 3. The Bethel store of Family Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2021. Family 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 Bethel store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2021. (Click the icon to view the four activities and their cost data.) (Click the icon to view additional cost driver information.) Read the requirements".

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10/22/2021 Chapter 6 - Homework-sehrish bashir 3. The Bethel store of Family Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2021. Family 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 Bethel store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2021. 5(Click the icon to view the four activities and their cost data.) (Click the icon to view additional cost driver information.) Read the requirements". Requirement 1. What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2021? Begin by calculating the budgeted cost-driver rates for February, then calculate March. (Round your answers to five decimal places, X.XXXXX.) Budgeted Cost-Driver Rates Activity January February March Ordering 2$ 78.00 92.00 Delivery Shelf-stocking Customer support 0.22 Now calculate total budgeted cost for each activity and the total budgeted indirect cost for March. (Use the rates you calculated above in your calculations. Round your answers to the nearest whole number.) Soft Fresh Packaged Activity Drinks Snacks Total pood Ordering Delivery Shelf-stocking Customer support Total Requirement 2. What are the benefits of using a Kaizen approach to budgeting? What are the limitations of this approach, and how might Family Mart management overcome them? Begin by reviewing the following statements and then select whether each one is a benefit or limitation of a Kaizen approach to budgeting. A. It will show unfavorable variances for managers whose activities do not meet the required monthly cost reductions. This likely will put more pressure on managers to creatively (1). seek out cost reductions. B. It assumes small incremental improvements each month. It is possible that some cost improvements arise from large discontinuous changes. (2) C. Company takes into consideration employee suggestions. They believe that employees who actually do the job, whether (3) in manufacturing, sales, or distribution, have the best information and knowledge of how the job can be done better. For any limitations selected above, determine how Family Mart management might overcome them? (If an input field is not used in the table, leave the input field empty; do not select a label.) 10/16 https://xlitemprod.pearsoncmg.com/api/v1/print/highered (4) (5) (9) 5: Data Table January 2021 January 2021 Budgeted Budgeted Amount of Cost Driver Used Cost-Driver Soft Fresh Packaged pood 14 Rate Drinks Snacks Activity Cost Driver 92 14 25 Ordering Number of purchase orders 78 63 Delivery Number of deliveries 2$ 18.00 22 172 98 Shelf-stocking Hours of stocking time $ 0.22 34,200 11,100 Customer support Number of items sold 009 2$ 6: More Info Each successive month, the budgeted cost-driver rate decreases by 0.2% relative to the preceding month. So, for example, February's budgeted cost-driver rate is 0.998 times January's budgeted cost-driver rate, and March's budgeted cost-driver rate is 0.998 times the budgeted February rate. Family Mart assumes that the budgeted amount of cost-driver usage remains the same each month.
Transcribed Image Text:10/22/2021 Chapter 6 - Homework-sehrish bashir 3. The Bethel store of Family Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2021. Family 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 Bethel store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2021. 5(Click the icon to view the four activities and their cost data.) (Click the icon to view additional cost driver information.) Read the requirements". Requirement 1. What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2021? Begin by calculating the budgeted cost-driver rates for February, then calculate March. (Round your answers to five decimal places, X.XXXXX.) Budgeted Cost-Driver Rates Activity January February March Ordering 2$ 78.00 92.00 Delivery Shelf-stocking Customer support 0.22 Now calculate total budgeted cost for each activity and the total budgeted indirect cost for March. (Use the rates you calculated above in your calculations. Round your answers to the nearest whole number.) Soft Fresh Packaged Activity Drinks Snacks Total pood Ordering Delivery Shelf-stocking Customer support Total Requirement 2. What are the benefits of using a Kaizen approach to budgeting? What are the limitations of this approach, and how might Family Mart management overcome them? Begin by reviewing the following statements and then select whether each one is a benefit or limitation of a Kaizen approach to budgeting. A. It will show unfavorable variances for managers whose activities do not meet the required monthly cost reductions. This likely will put more pressure on managers to creatively (1). seek out cost reductions. B. It assumes small incremental improvements each month. It is possible that some cost improvements arise from large discontinuous changes. (2) C. Company takes into consideration employee suggestions. They believe that employees who actually do the job, whether (3) in manufacturing, sales, or distribution, have the best information and knowledge of how the job can be done better. For any limitations selected above, determine how Family Mart management might overcome them? (If an input field is not used in the table, leave the input field empty; do not select a label.) 10/16 https://xlitemprod.pearsoncmg.com/api/v1/print/highered (4) (5) (9) 5: Data Table January 2021 January 2021 Budgeted Budgeted Amount of Cost Driver Used Cost-Driver Soft Fresh Packaged pood 14 Rate Drinks Snacks Activity Cost Driver 92 14 25 Ordering Number of purchase orders 78 63 Delivery Number of deliveries 2$ 18.00 22 172 98 Shelf-stocking Hours of stocking time $ 0.22 34,200 11,100 Customer support Number of items sold 009 2$ 6: More Info Each successive month, the budgeted cost-driver rate decreases by 0.2% relative to the preceding month. So, for example, February's budgeted cost-driver rate is 0.998 times January's budgeted cost-driver rate, and March's budgeted cost-driver rate is 0.998 times the budgeted February rate. Family Mart assumes that the budgeted amount of cost-driver usage remains the same each month.
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