Assume That Budgeted Cost Driver Usage Data Embodied Continue Over The Forseeable Fu 2904035

Refer to text Exhibit 10.19 (the ABB for factory overhead for Kerry Company, Inc.) As the Kerry, you have been asked to evaluate the possibility of implementing a continuous-improvement budgeting system for the company. Assume that budgeted cost-driver usage data embodied continue over the forseeable future. Document Preview:

10-44: Kaizen Budgeting; Activity-Based Budgeting (ABB)BackgroundRefer to text Exhibit 10.19 (the ABB for factory overhead for Kerry Company, Inc.) As the management accountant for Kerry, you have been asked to evaluate the possibility of implementing a continuous-improvement (i.e., Kaizen) budgeting system for the company. Assume that budgeted cost-driver usage data embodied in Part A of EXHIBIT 10.19 willcontinue over the forseeable future. DataText EXHIBIT 10.19 (ABB for Factory Overhead, Kerry Company, Inc.):AprilA: Data Units of output 22,500 Direct labor hours: Semiskilled 11,250 Skilled 4,500 Machine Hours 6,650 No. of batches (@2,500/batch) 9 No. of products 5Activity-B. Activity-based budget (ABB)Cost RateSemi-skilled, hour-related $0.60 $6,750Skilled, hour-related $0.20 $900Machine-hour-related $3.20 $21,280Batch-related $1,700 $15,300Product-related $5,000 $25,000Facility-level costs $50,000 $50,000 Total $1,19,230Assumed rate of cost-driver decrease, starting in May =Required1. Recalculate the budgeted factory overhead costs for June under the assumption that, starting in May, each budgeted cost-driver rate decreases by 0.05% relative to the preceding month. 2. In general, what are the anticipated benefits of using a Kaizen approach to budgeting?

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p48.pdf