Answer the Following Questions Using the Information Below:
Margaret River

question 69

Multiple Choice

Answer the following questions using the information below:
Margaret River Enterprises are using the kaizen approach to budgeting for 2018.The budgeted income statement for January 2018 is as follows:
$\begin{array}{lr}\text { Sales (84 000 units) } & \$ 700000 \\\text { Less: Cost of goods sold } & \underline{500000} \\& \\\text { Gross margin } & 200000 \\\text { Operating expenses (includes } \$ 50000 \text { of fixed costs) } & \underline{150000} \\& \\\text { Operating profit } & \$ 50000\end{array}$
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)$490 050
• B)$500 000
• C)$297 000
• D)$294 000

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Definitions:

Separately Reported

Financial items or activities that are shown distinctly in financial statements to provide clarity and understanding of a company's financial position.

Outstanding Checks

Checks that have been issued and recorded in the account holder's register, but have not yet been cashed or cleared by the bank.

Customers

Individuals or businesses that purchase goods or services from another business.

Promptly

Quickly or without delay, often used in the context of responding to communications or fulfilling obligations.