Steve Corporation Is Using the Kaizen Approach to Budgeting for 2015.The

Essay

Steve Corporation is using the kaizen approach to budgeting for 2015.The budgeted income statement for January 2015 is as follows:
$\begin{array}{lr}\text { Sales ( } 240,000 \text { units) } & \$ 360,000 \\\text { Less: Cost of goods sold } & 240,000\\\text { Gross margin } & 120,000 \\\text { Operating expenses (includes } \$ 32,000 \text { of fixed costs) } & 96,000 \\\text { Net income }&\$24,000\end{array}$ Under the kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
Required:
Prepare a kaizen-based budgeted income statement for March of 2015.