Answer the Following Questions Using the Information Below:
Sherry and John

question 7

Multiple Choice

Answer the following questions using the information below:
Sherry and John Enterprises are using the kaizen approach to budgeting for 2015. The budgeted income statement for January 2015 is as follows:
$$\begin{array} { l r } \text { Sales ( } 168,000 \text { units) } & \$ 1,000,000 \\\text { Less: Cost of goods sold } & 600,000 \\\text { Gross margin } & 400,000 \\\text { Operating expenses } & 300,000 \\\text { (includes } \$ 50,000 \text { of fixed costs) } & \\\text { Operating income } & \$ 100,000 \\\hline\end{array}$$ 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 2015?

• A) $588,060
• B) $592,000
• C) $600,000
• D) $594,000

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Definitions:

Internal Consistency Reliability

A measure of how well the items on a test measure the same construct or concept.

Content Validity

The extent to which a test measures all facets of the concept it is intended to assess.

External Validity

The extent to which the results of a study can be generalized to other situations, populations, or settings.

Alternate Form Reliability

A measure of consistency where different versions of a test produce similar results, indicating the test’s reliability over time.