Question

E6-31 (similar to) Question Help The Orwell store of Family Mart, a chain of small neighborhood convenience stores, has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Family Mart has three product categories: soft drinks (35% of cost of goods sold [COGST, fresh snacks (25% of COGS), and packaged food (40% of COGS). The following table shows the four activities that consume indirect resources at the Orwell 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 Budgeted Cost-Driver Rates January February March $ 88.00 82.00 20.00 0.22 Shelf-stocking Customer support 0 Data Table Activity Cost Driver Ordering Number of purchase orders Delivery Number of deliveries Shelf-stocking Hours of stocking time Customer support Number of items sold January 2018 Budgeted Cost-Driver Rate $ 88 $ 82 $ 20.00 $ 0.22 January 2018 Budgeted Amount of Cost Driver Used Soft Fresh Packaged Drinks Snacks Food 1724 1268 18172 4,900 34,300 10,600 Print Done

Answer 1

1. Calculation of total budgeted cost for each activity and total budgeted indirect cost for March 2018. A A Calculation of budgeted cost driver rates. Activity January February March Ordering 88.00 $ 87.82400 $ 87.64835 Delivery 82.00 $ 81.83600 $ 81.67233 Shelf-Stocking 20.00 $ 19.96000 $ 19.92008 Customer Support 0.22 $ 0.21956 $ 0.21912 Explanation : Every Activity is decreased by 0.2% from the previous months' figure. This will compute the Budgeted Cost for each Activity A A Total budgeted cost for each activity and the total budgeted indirect cost for March, 2018. Fresh Activity Soft Drinks Packaged Snacks Total Foods Ordering 1,490 $ 2,104 $ 1,490 $ 5,084 Delivery $ 980 $ 5,554 $ 1,878 $ 8,412 Shelf-Stocking $ 359 $ 3,426 $ 1,932 $ 5,717 Customer Support $ 1,074 $ 7,516 $ 2,323 $ 10,912 Totals 3,902 $ 18,599 $ 7,623 $ 30,125 Explanation : Each Activity Cost is arrived by multiplying the budgeted cost for the month of March with the Amount of Cost Driver Used in Janauary Month to calculate the budgeted cost for each activity and the total budgeted indirect cost for March, 2018. to to totoo