Wk 6 Managerial Analysis Scenario Green Pastures

Wk 6 Managerial AnalysisChristina ForresterACC/561Sheri WangApril 1, 2018Static budgetBased on the static budget differences, the principal cause of the loss of net income is a major drop in price charged per mare for a boarding day.Green Pastures had budgeted to charge$25 daily boarding fees per mare but actually charges an average of $20 per mare in the financial year. The effect of the $5 drop in daily boarding fees resulted in a loss of $ 95,000 in revenue. Further, the numbers of boarding days were 2,900 days short of the target 21,900 days. The 2,900 days short translate to (2,900 X 25) $ 72,500. The shortfall in budgeted revenue of $167,500 is attributable to the drop in daily boarding rates and the drop in the number of boarding days. Further contribution to the drop in revenue is attributable to the unfavourable variance in advertising and entertainment expenses which exceeded budget by$4,000 and $2,000 respectively (Klychova, Faskhutdinova, & Sadrieva, 2014). To assess the efficiency of the management incontrolling expenses the variances are analysed in the table below. ItemActualMaster BudgetDifference % ageFeed 104,390.0 109,500.0 -5110.00F-5%Veterinary Fees 58,838.0