Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 54

Easy Clean operates a chain of dry cleaners. It is experimenting with a continuous improvement (i.e., kaizen) budget for operating expenses. Currently, a typical location has operating expenses of $10,000 per month. Plans are in place to achieve labor and utility savings. The associated operational changes are estimated to reduce monthly operating costs by a factor of 0.99 beginning in January. What is the estimated operating cost for January For June For December