Nyborg Supermarkets has a kaizen (continuous improvement) approach to budgeting monthly activity area costs for each month of 2008. February's budgeted cost driver rate is 0.998 times the budgeted January 2008 rate. March's budgeted cost driver rate is 0.998 times the budgeted February 2008 rate, and so on. Assume that March 2008 has the same budgeted amount of cost drivers used as did January 2008.
Required
1 What is the total budgeted cost for each activity area in March 2008?
2 What are the benefits of Nyborg Supermarkets adopting a kaizen budgeting approach? What are the limitations?