Chapter 6, Problem 6.26E

1.

To determine

Activity Based Costing:

The activity-based costing refers to the allocation of the costs on the basis of the specific set of activities. The cost driver related to each activity determines the cost of the activity.

Kaizen Budgeting:

The Kaizen budgeting is a budgeting technique which is used to reduce the costs of the business. This budgeting process helps in continuous improvement in cost reduction by applying the small improvements.

The total budgeted cost for each activity and the total budgeted indirect cost for March.

2.

To determine

To explain: The benefits of using Kaizen approach to budgeting and the limitations of this approach and the ways to overcome them.