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Question - Jabari Inc. uses the kaizen approach to budgeting for 2020. The budgeted income statement for January 2020 shows:
Revenues of $329674;
Direct materials of $74165;
Direct Labour of $60946;
Variable Manufacturing Overhead of $23895,
Fixed Manufacturing Overhead of $17815,
Operating Expenses of $72646.
Under the kaizen approach,
Direct Materials decrease by 4%; Direct Labour increase by 3%; variable overhead decreased by 6%; and Operating Expenses decreased by 2%.
Required - Find the operating income for the month of February taking into account the kaizen costing changes?
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