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 21,900 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 semi fixed 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.

Develop a minimum 700-word examination of the financial statements and include the following:

• Based on the static budget report:
• What was the primary cause(s) of the loss in net income?
• Did management do a good, average, or poor job of controlling expenses?
• Were management's decisions to stay competitive sound?
• Prepare a flexible budget report for the year.
• Based on the flexible budget report:
• What was the primary cause(s) of the loss in net income?
• Did management do a good, average, or poor job of controlling expenses?
• Were management's decisions to stay competitive sound?
• What course of action do you recommend for the management of Green Pastures?

Show all work in excel for budget tables. Show computations in worddocument.Must include at least 2 references with citation

Number of Mares Number of Boarding Days Sales Less: Variable Expenses Feed Veterinary Fees Blacksmith Fees Supplies Total Variable Expenses Contribution Margin Less: Fixed Expenses Depreciation Insurance Utilities Repairs and Maintenance Labor Advertisement Entertainment Total Fixed Expenses Net Income Actual 52 19,000 $380,000 Master Budget 60 21,900 $547,500 104,390 58,838 4,984 10,178 178,390 201,610 109,500 65,700 5,475 12,045 192,720 354,780 40,000 11,000 12,000 10,000 88,000 12,000 7,000 180,000 $21,610 40,000 11,000 14,000 11,000 95,000 8,000 5,000 184,000 $170,780 Difference 8U 2,900 U $167,500 U 5,110 F 6,862 F 491 F 1,867 F 14,330 F 153,170 U -0-02,000 F 1,000 F 7,000 F 4,000 U 2,000 U 4,000 F $149,170 U