Expand Your Critical Thinking 25-01 a2-a3, b, c2-c3 (Part Level Submission) Green Pastures is a 400-acre far on the autskirts af the Kentucky Bluegrass, specializing in the boarding of braodmares and their foals. A recent economic dawnturn in the thoroughbred industry has made the boarding business extremely competitive. To meet the competition, Green Pastures planned in 2020 to entertain dlients, advertise more extensively, and absorb expenses formerly paid by dlients such as veterinary and blacksmith fees. The budget report for 2020 follows. As shown, the state income statement budget for the year is based on an expected 24,500 boarding days at $25 per mare. The variable expenses per mare per day were budgeted: feed $5, veterinary fees $3 blacksmith fers $0.25, and supplirs s0.55. 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. GREEN PASTURES Static Budget Income Statement For the Year Ended December 31, 2020 Actual 52 21,300 $425,600 Master Budget Difference Number of mares Number of boarding days Sales Less: Variable expenses 60 24,500 $12,500 8 Unfavorable 3,200 Unfavorable 186,900 Unfavorable Feed Veterinary fees Blacksmith fees Supplies 116,920 65,899 5,582 11,399 199,800 225,800 122,5D0 73,500 6,125 13,475 215,600 396,900 5,580 Favorable 7,601 Favorable 543 Favorable 2,076 Favorable 15,900 Favorable 171,100 Unfavorable Total variable expenses Contribution margin Less: Fixed expenses 45,000 12,000 13,000 Repairs and maintenance11,000 99,000 13,000 8,000 201,000 45,000 12,000 16,000 12,000 106,000 9,000 6,D00 206,000 24,800 3,000 Favorable 1,000 Favorable 7,000 Favorable 4,000 Unfavorable 2,000 Unfavorable 5,000 Favorablr Utilities Labor Tatal fixed expenses $190,900 $166,100 Unfavorable Net income Prepare a flexible budget report for the year. (List varible costs before fixed costs.) GREEN PASTURES Income Statement Flexible Budget Report For the Year Ended December 31, 2020 Difference Favorable Unfavorable Neither favorable nor unfavorable Budget 21,300 BD Actual 21,300 BD Boarding days (BD)