Stark Company Is Developing Its Budgets for 2016 and for the First

question 155

Essay

Stark Company is developing its budgets for 2016 and for the first time will use the Kaizen approach.The initial 2016 income statement,based on static data from 2015 is as follows:

Selling prices for 2016 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 2016.

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Definitions:

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