Calculate the percent change in costs

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Problem - Novak, the partner in charge of a small accounting firm, has launched a kaizen costing program to reduce office support costs. She expects the program to reduce costs by at least 10%. Information for the first six months of the program and estimated cost savings for the next six months follows.

 

Actual Cost Last 6 Months

Estimated Cost Next 6 Months

Postage fees-deliver more reports and tax returns using fax; the company can make unlimited calls for a flat fee per month

$7,100

$6,600

Photocopy costs-outsource copy function to save labour cost

$3,100

$2,600

Labour costs-more efficient scheduling of support staff

$12,800

$12,300

Required -

1. Calculate the percent change in costs.

2. Determine whether the kaizen cost goal is likely to be met.

Reference no: EM132746304

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