Question

Brief Exercise 10-18 (LO 10-6, 10-7) Easy Clean operates a chain of dry cleaners. It is experimenting with the use of a continuous improvement (ie., kaizen) budget for operating expenses. Currently, a typical location has operating expenses of $15,000 per month. Plans are in place to achieve labor and utility savings. The associated operational changes are estimated to reduce monthly operating expenses by a factor of 0.99 beginning in January 11.11 points (3 02:42 What is the estimated operating expenses for January? For June? For December? (Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount.) Skipped Estimated operating costs

Answer 1

Estimated Operating costs:

January = $15,000 x 0.99^1 = $14,850

June = $15,000 x 0.99^6 = $14,122

December = $15,000 x 0.99^12 = $13,296

	January	February	March
Estimated Operating costs	$14,850	$14,122	$13,296