Sherry and John Enterprises Are Using the Kaizen Approach to Budgeting

question 135

Multiple Choice

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?

• A) $637,065
• B) $656,500
• C) $650,000
• D) $643,500

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Definitions:

Franchisor Liability

Legal responsibility of the franchisor for certain happenings within the franchisee's business operation, depending on the level of control exercised by the franchisor.

Annual Sales

The total revenue generated from goods or services sold over a fiscal year.

Franchise Percentage

The portion of revenues or profits given to a franchisor by a franchisee as a contractual payment for being part of the franchisor’s system.

Personnel Training

The process of providing employees with the necessary skills and knowledge to perform their jobs effectively.