Assignment Steps
Resources:Generally Accepted Accounting Principles (GAAP) U.S. Securities and Exchange Committee (SEC) Green Pastures Static Budget Income Statement
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Scenario:Green Pastures is a 400-acre farm on the outskirts of the Kentucky Bluegrass specializing in the boarding of broodmares and their foals. A recent economic downturn in the thoroughbred industry has led to a decline in breeding activities and it has made the boarding business extremely competitive. To meet the competition Green Pastures planned in 2017 to entertain clients advertise more extensively and absorb expenses formerly paid by clients such as veterinary and blacksmith fees.
The budget report for 2017 is presented as an attachment. As shown the static income statement budget for the year is based on an expected 21900 boarding days at $25 per mare. The variable expenses per mare per day were budgeted: feed $5 veterinary fees $3 blacksmith fees $0.25 and supplies $0.55. All other budgeted expenses were either semifixed or fixed.
During the year management decided not to replace a worker who quit in March but it did issue a new advertising brochure and did more entertaining of clients.
Developa minimum 700-word examination of the financial statements and include the following:
Showyour work in MicrosoftWord or Excel.
Completecalculations/computations using MicrosoftWord or Excel.
Formatthe assignment consistent with APA guidelines.
Green Pastures
Static Budget Income Statement
For the Year Ended December 31 2017
Actual Master Budget Difference
Number of Mares 52 60 8 U
Number of Boarding Days 19000 21900 2900 U
Sales $380000 $547500 $167500 U
Less: Variable Expenses
Feed 104390 109500 5110 F
Veterinary Fees 58838 65700 6862 F
Blacksmith Fees 4984 5475 491 F
Supplies 10178 12045 1867 F
Total Variable Expenses 178390 192720 14330 F
Contribution Margin 201610 354780 153170 U
Less: Fixed Expenses
Depreciation 40000 40000 -0-
Insurance 11000 11000 -0-
Utilities 12000 14000 2000 F
Repairs and Maintenance 10000 11000 1000 F
Labor 88000 95000 7000 F
Advertisement 12000 8000 4000 U
Entertainment 7000 5000 2000 U
Total Fixed Expenses 180000 184000 4000 F
Net Income $21610 $170780 $149170 U
Grading Guide
Content
Met
Partially Met
Not Met
Comments:
Based on the static budget report answered
the following questions:
o What was the primary cause(s) of the loss in net income?
o Did management do a good average or poor job of controlling expenses?
o Were managements decisions to stay competitive sound?
Prepared a flexible budget report for the year.
Based on the flexible budget report answered the following questions:
o What was the primary cause(s) of the loss in net income?
o Did management do a good average or poor job of controlling expenses?
o Were managements decisions to stay competitive sound?
Answered the following question:
What course of action does student recommend for the management of Green Pastures?
Showed work in MicrosoftWord or Excel.Completed calculations/computations using MicrosoftWord or Excel.
The examination is a minimum 700words in length.
Total Available
Total Earned
6
#/6
Writing Guidelines
Met
Partially Met
Not Met
Comments:
The paperincluding tables and graphs headings title page and reference pageis consistent with APA formatting guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a reference page.
Paragraph and sentence transitions are present logical and maintain the flow throughout the paper.
Sentences are complete clear and concise.
Rules of grammar and usage are followed including spelling and punctuation.
Total Available
Total Earned
2
#/2

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