The Bethel store of Gabriel's Corner, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Gabriel's Corner has three product categories: soft drinks (35% of cost of goods sold [COGS]), fresh snacks (25% of COGS), and packaged food (40% of COGS). The following table shows the four activities that consume indirect resources at the Bethel store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2018. Requirement 1. What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2018? Begin by calculating the budgeted cost-driver rates for February, then calculate March. (Round your answers to five decimal places, X.XXXXX.) Budgeted Cost-Driver Rates January February March Activity Data table $ 86.00 78.00 Ordering Delivery Shelf-stocking Customer support 24.00 January 2018 January 2018 Budgeted 0.19 Budgeted Amount of Cost Driver Used Cost-Driver Soft Fresh Packaged Food -X Rate Drinks Snacks equirements $ 86 12 26 12 Activity Cost Driver Ordering Number of purchase orders Delivery Number of deliveries Shelf-stocking Hours of stocking time Customer support Number of items sold $ 78 9 66 21 $ 24.00 16 171 92 1. What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2018? 2. What are the benefits of using a Kaizen approach to budgeting? What are the limitations of this approach, and how might Gabriel's Corner management $ 0.19 4,200 34,500 11,000 The Bethel store of Gabriel's Corner, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Gabriel's Corner has three product categories: soft drinks (35% of cost of goods sold [COGS]), fresh snacks (25% of COGS), and packaged food (40% of COGS). The following table shows the four activities that consume indirect resources at the Bethel store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2018. Requirement 1. What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2018? Begin by calculating the budgeted cost-driver rates for February, then calculate March. (Round your answers to five decimal places, X.XXXXX.) Budgeted Cost-Driver Rates January February March Activity Data table $ 86.00 78.00 Ordering Delivery Shelf-stocking Customer support 24.00 January 2018 January 2018 Budgeted 0.19 Budgeted Amount of Cost Driver Used Cost-Driver Soft Fresh Packaged Food -X Rate Drinks Snacks equirements $ 86 12 26 12 Activity Cost Driver Ordering Number of purchase orders Delivery Number of deliveries Shelf-stocking Hours of stocking time Customer support Number of items sold $ 78 9 66 21 $ 24.00 16 171 92 1. What are the total budgeted costs for each activity and the total budgeted indirect cost for March 2018? 2. What are the benefits of using a Kaizen approach to budgeting? What are the limitations of this approach, and how might Gabriel's Corner management $ 0.19 4,200 34,500 11,000
