Managerial Analysis S Ba Sed On The Static

Managerial AnalysisNameCourseTutor’s NameDateBased On the Static Budget ReportThe primary cause of the loss of net income is a significant reduction in price charged per mare-boarding daythe and the number of boarding days. The budgeted daily boarding fees per mare was $25, however Green Pastures only realised an average of$20 per mare. This translated to a loss of $ 95,000 in revenue. The number of boarding days fell below budget by 13% and the number of mares also fell short of budget by 13%. The decline in the number of mares and the number of boarding days resulted in a 30% shortfall in budgeted revenue. While the shortfall in revenue can be attributed to the economic situation, it appears that the management did a poor job in controlling expenses. Although the number of mares and the number of boarding days fell short of the budget by 13% each, the total variable cost only declined by 7% as a result the contribution to overheads fell short by 43%. The shortfall in the number of boarding days accounted for $ 72,500 shortfall in revenue (Drury, 2009).A variable cost is