The Elmore store of Carlson Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Carlson Mart 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 Elmore store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2018. (Click the icon to view the four activities and their cost data.) (Click the icon to view additional cost driver information.) Read the requirements. 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.) Activity Ordering Delivery Shelf-stocking Customer support Budgeted Cost-Driver Rates January February March $ 86.00 84.00 i Data Table 22.00 0.18 January 2018 Budgeted Amount of Cost Driver Used Soft Drinks January 2018 Budgeted Cost-Driver Rate $ 86 $ 84 $ 22.00 $ 0.18 15 Activity Cost Driver Ordering Number of purchase orders Delivery Number of deliveries Shelf-stocking Hours of stocking time Customer support Number of items sold Fresh Packaged Snacks Food 24 15 63 21 176 34,100 11,100 Enter any number in the edit fields and then clic 10 19 4,900 2 parts remaining Each successive month, the budgeted cost-driver rate decreases by 0.3% relative to the preceding month. So, for example, February's budgeted cost-driver rate is 0.997 times January's budgeted cost-driver rate, and March's budgeted cost-driver rate is 0.997 times the budgeted February rate. Carlson Mart assumes that the budgeted amount of cost-driver usage remains the same each month. Soft Drinks Fresh Snacks Packaged Food Activity Total Ordering Delivery Shelf-stocking Customer support Total Requirement 2. What are the benefits of using a Kaizen approach to budgeting? What are the limitations of this approach, and how might Family Mart management overcome them? Begin by reviewing the following statements and then select whether each one is a benefit or limitation of a Kaizen approach to budgeting. A. It will show unfavorable variances for managers whose activities do not meet the required monthly cost reductions. This likely will put more pressure on managers to creatively seek out cost reductions. B. It assumes small incremental improvements each month. It is possible that some cost improvements arise from large discontinuous changes. Company takes into consideration employee suggestions. They believe that employees who actually do the job, whether in manufacturing, sales, or distribution, have the best information and knowledge of how the job can be done better