Windsor, Inc. 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, Windsor, Inc. 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 18,800 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.

Windsor, Inc. Static Budget Income Statement For the Year Ended December 31, 2017
			Actual			Master Budget			Difference
Number of mares			52			60			8	Unfavorable
Number of boarding days			16,300			18,800			2,500	Unfavorable
Sales			$326,800			$470,000			$143,200	Unfavorable
Less: Variable expenses
	Feed		89,780			94,000			4,220	Favorable
	Veterinary fees		50,601			56,400			5,799	Favorable
	Blacksmith fees		4,286			4,700			414	Favorable
	Supplies		8,753			10,340			1,587	Favorable
Total variable expenses			153,420			165,440			12,020	Favorable
Contribution margin			173,380			304,560			131,180	Unfavorable
Less: Fixed expenses
	Depreciation		34,000			34,000			0
	Insurance		9,000			9,000			0
	Utilities		10,000			12,000			2,000	Favorable
	Repairs and maintenance		9,000			9,000			0	Favorable
	Labor		76,000			82,000			6,000	Favorable
	Advertisement		10,000			7,000			3,000	Unfavorable
	Entertainment		6,000			4,000			2,000	Unfavorable
Total fixed expenses			154,000			157,000			3,000	Favorable
Net income			$19,380			$147,560			$128,180	Unfavorable

Prepare a flexible budget report for the year.

Windsor, Inc Income Statement Flexible Budget Report For the Year Ended December 31,2017 Budget Actual Boarding days (BD) 16,300 BD 16,300 BD Windsor, Inc Income Statement Flexible Budget Report For the Year Ended December 31,2017 Difference Favorable Unfavorable Neither favorable nor unfavorable udget Actual 16,300 BD 16,300 BD $ $ Budget Actua Boarding days (BD 16,300 BD 16,200 BD S > >