Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows:
Sales (168,000 units) | $1,060,000 |
Less: Cost of goods sold | 620,000 |
Operating expenses | 390,000 |
(includes $60,000 of fixed costs)
Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 3% per month.
What is budgeted gross margin for March 2018?
◦ $413,996
◦ $426,800
◦ $466,796
◦ $476,642