Kaizen approach to activity-based budgeting (continuation of 14-21). (20-30 minutes) Nyborg Supermarkets has a kaizen (continuous improvement) approach to budgeting monthly activity area costs for each month of 2000. February’s budgeted cost driver rate is 0.998 times the budgeted January 2000 rate. March’s budgeted cost driver rate is 0.998 times the budgeted February 2000 rate, and so on. Assume that March 2000 has the same budgeted amount of cost drivers used as did January 2000.

REQUIRED 1. What is the total budgeted cost for each activity area in March 2000?

2. What are the benefits of Nyborg Supermarkets adopting a kaizen budgeting approach? What are the limitations?  nju7