You have recently taken over as the General Manager for Grey Wolf Golf Course. The most recent monthly Budget versus Actual Income Statement ended August has been supplied below (

Grey Wolf Golf Course Income Statement For the Month ended August

Budget Actual

Number of golf rounds 2,000 2,300 Revenue

Golf Rounds 700,00 0 800,00 0 Power Carts 70,000 80,500 770,00 0 880,50 0

Variable Costs

Labour 250,00 0 250,00 0 Golf Cart fuel 14,000 16,000 Maintenance 24,000 30,000 Small Tools 15,000 17,000 Depreciation 12,000 13,800 315,00 0 326,80 0

Fixed Costs

Management Fees 65,000 65,000 Rent 90,000 90,000 Utilities 20,000 15,000 175,00 0 170,00 0

Income (Loss) before taxes 280,00 0 383,70 0

The owner of the golf course is happy about the results, however you are not so confident on that assumption. Required:

- Prepare a flexible budget to actual income statement and evaluate if the owner of the golf courses opinion on the results of the golf course are correct. Briefly discuss. - Are there any line items that you would want to investigate the differences in variances? Which ones and why?