D20 fr A B D E F G H 1 J L N 0 1 Master Budget and Responsibility Accounting 2 Kaizen approach to activity-based budgeting 3 The Jerico store of Jiffy Mart, a chain of small neighborhood convenience stores, is preparing its activity-based budget for January 2018. Jiffy Mart has three product categories: soft drinks (35% of cost of goods sold [COGS]), fresh produce (25% of COGS), and packaged food (40% of COGS). Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Each successive month, the budgeted cost-driver rate decreases by 0.4% relative to the preceding month. So, for example, February's budgeted cost-driver rate is 0.996 times January's budgeted cost-driver rate, and March's budgeted cost-driver rate is 0.996 times the budgeted February rate. Jiffy Mart assumes that the budgeted amount of cost-driver usage remains the same each month. The following table shows the four activities that consume indirect resources at the Jerico store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each 4 activity in January 2018. 5 6 January 2018 Budgeted Amount of Cost Driver Used 7 8 Soft Fresh Packaged Food 9 Cost Driver Drinks Snacks 10 Number of purchase orders January 2018 Budgeted Cost-Driver Rate $45 $41 $10.50 $0.09 14 24 14 Activity Ordering Delivery Shelf stocking Customer support 11 Number of deliveries 12 62 19 12 16 172 94 Hours of stocking time Number of items sold 13 4,600 34,200 10,750 14 15 Use the blue shaded areas on the ENTERANSWERS tab for inputs. 16 Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong. 17 18 Requirement 19 What are the total budgeted cost for each activity and the total budgeted indirect cost for March 2018? 20 A B D E F (Always use cell references and formulas where appropriate to receive full 1 credit. If you copy/paste from the Instruction tab you will be marked wrong.) 2. Fresh Packaged 3 Activity Soft Drinks Snacks Food Total 4 Ordering 5 Delivery 6 Shelf-stocking 7 Customer support 8 Total 9 10