Calculate the expected costs of each cost item

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Reference no: EM133378712

Question: Orchid Unit, a division of Flower Berhad, has been displeased with the costs of servicing its consumer loans. Assume that it has decided to implement a Kaizen-based cost improvement program. Last year (2022), Orchid Unit incurred the following costs:

Cost item	RM
Loan processing	14,500
Customer relation	3,600
Printing and postage	800

For the next two years, Orchid expects an increase in the costs will increase 4 percent because of the inflation.

Required:

If the company has continuous improvement of 1 percent each year, calculate the expected costs of each cost item for the next two years.

Reference no: EM133378712

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