Static vs. Flexible Budget Analysis Project BLU-Grass Acres is a 350-acre farm on the outskirts of Louisville, Kentucky, which specializes in the boarding of broodmares and their foals. They have the capacity to board up to 75 horses. The recent economic downturn in the thoroughbred industry has made the boarding business extremely competitive in this area. To meet the competition, BLU-Grass planned in 2022 to entertain clients, advertise more extensively, and absorb expenses formerly paid by clients such as veterinary and blacksmith fees. Jayzee the bookkeeper (sometimes called LAZ-E!) started to prepare some financial analysis and he remembered learning about static and flexible budgets in his college accounting class. Jayzee starts with a static budget report. Unfortunately, he doesn't know how to complete the report and management wants an analysis on the year. The static budget income statement budget for the year is based on an expected 365 boarding days per year for each horse, at a fee of $30 per mare. The variable expenses per mare per day were budgeted: feed $7, veterinary fees $4, blacksmith fees $0.55, and supplies $0.35. All other budgeted expenses were either semifixed or fixed. During the year, management DID NOT replace a worker who quit in June, but it did issue a new advertising brochure and did more entertaining of clients. Jayzee hires you as a consultant and needs your help, quick, to be sure he is prepared for the meeting!! BLU-Grass Acres Static Budget Income Statement For the Year Ended 12/31/2022 Favorable or Actual Master Difference Unfavorable 451 68 Number of Mares Number of Boarding Days Sales 16250 S568,7501 Variable Expenses Feed S146,250 Veterinary Fees $97,500 Blacksmith Fees|S5,688 Supplies $4.063 Total Variable Expenses S253,500 Contribution Margin S315,250 Less: Fixed Expenses Depreciation Insurance Utilities Repairs and Maintenance $40,000 40,000 S $25,000 11,000 S $17,000 14.000 Is |$30,250 11,000 $88,000 95,000 S $35.000 8,000 Labor Advertisement $50,000 5,000 Entertainment Total Fixed Expenses $285,2501 Net Income $30,000 3. In excel or google drive (sheets), complete a flexible budget report (use formulas and cell referencing whenever possible in your spreadsheet). 4. Based ONLY ON the FLEXIBLE budget report, provide your written analysis on the following: d. What were the reasons for the decline in net income? e. How effective was management at controlling expenses? f. Do you think management made good management decisions