Answer the Following Question(s)using the Information Below

question 31

Essay

Answer the following question(s)using the information below.Sherry and John Enterprises are using the Kaizen approach to budgeting for 2019.The budgeted income statement for January 2019 is as follows:
Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-Stark Company is developing its budgets for 2019 and for the first time will use the Kaizen approach.The initial 2019 income statement, based on static data from 2018 is as follows:
Selling prices for 2019 are expected to increase by 6 percent, and sales volume in units will decrease by 10 percent.The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit.Other than amortization, all other operating costs are expected to decline by 5 percent.Required:
Prepare a Kaizen-based budgeted income statement for 2019.

Define and calculate price elasticity of demand for various products and understand its implications.

Understand the concept of cross-price elasticity of demand and how it reflects the relationship between substitutes and complements.

Realize the significance of income elasticity of demand and how it differs in the short and long run for various goods and services.

Interpret economic figures and graphs related to supply and demand in different time frames (short run, intermediate run, long run).