Marigold Corp. 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, Marigold Corp. 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 below. As shown, the static income statement budget for the year is based on an expected 17.100 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. Marigold Corp. Static Budget Income Statement For the Year Ended December 31, 2017 Actual Master Budget 52 60 Difference Number of mares 8 Unfavorable Number of boarding days 14,800 17.100 2,300 Unfavorable Sales $296,400 $427,500 $131,100 Unfavorable Less: Variable expenses Feed 81,420 85,500 4,080 Favorable 5,406 Favorable Veterinary fees 45.894 51,300 Blacksmith fees 3,888 4,275 387 Favorable 1.466 Favorable Supplies 7.939 9,405 Total variable expenses 139,141 150,480 11,339 Favorable Contribution margin 157.259 277,020 119.761 Unfavorable Less: Fixed expenses Depreciation 31,000 31,000 -0- Insurance 9.000 9,000 -0- Utilities 9,000 11,000 2,000 Favorable Repairs and maintenance 8,000 9,000 1.000 Favorable Labor 69,000 74,000 5,000 Favorable Advertisement 9,000 6,000 Entertainment 5.000 4,000 3,000 Unfavorable 1,000 Unfavorable 4,000 Favorable Total fixed expenses 140,000 144,000 Net income $17.259 $133,020 $115,761 Unfavorable Answer the following Marigold Corp. Income Statement Flexible Budget Report For the Year Ended December 31,2017 Difference Favorable Unfavorable Neither favorable nor unfas Budget Actual 14,800 BD 14,800 BD $ 296400 370000 $ 73600 Unfavorab 81420 74000 7420 i Unfavorab 44400 1494 45894 i Unfavorab 3700 188 i 3888 Unfavorab 8140 201 7939 Favorable 130241 8901 i Unfavorab 139141