Allscott Company Is Developing Its Budgets for 2013 and for the First

question 134

Essay

Allscott Company is developing its budgets for 2013 and for the first time will use the Kaizen approach. The initial 2013 income statement, based on static data from 2012, is as follows:
Selling prices for 2013 are expected to increase by 8%, and sales volume in units will decrease by 10%. The cost of goods sold as estimated by the kaizen approach will decline by 10% per unit. Other than depreciation, all other operating costs are expected to decline by 5%.
Required:
Prepare a Kaizen-based budgeted income statement for 2013.

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Definitions:

Imports

The act of bringing goods or services into one country from another for commercial purposes.

Domestic Buyers

Consumers or entities within a country that purchase goods and services produced in their own country.

Tariffs

Taxes imposed by a government on imported or exported goods.

Protective Tariff

A tariff imposed by a government on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.