Business Finance
Managerial Analysis Word Document Report and Excel Spreadsheet Calculations

Question Description

I am currently in a graduate accounting course and am needing some help to explain and calculate a company's static budget report, which attached below is a copy of a company named Green Pastures of their Static Budget Income Statement for the year ending December 31, 2017:

Purpose of Assignment

This comprehensive case requires students to evaluate a static budget and prepare flexible budgets to meet managerial needs. Students are required to calculate and analyze variances and discuss how variances are critical to managerial decision making.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Committee (SEC), Green Pastures Static Budget Income Statement (Income Statement of this company attached below).

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Scenario: Green Pastures 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, Green Pastures 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 as an attachment. As shown, the static income statement budget for the year is based on an expected 21,900 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. (Income Statement of this company attached below).

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.

Develop a minimum 700-word or more examination of the financial statements and include the following:

  • Introduction
  • Based on the static budget report:
    • What was the primary cause(s) of the loss in net income?
    • Did management do a good, average, or poor job of controlling expenses?
    • Were management's decisions to stay competitive sound?
  • Prepare a flexible budget report for the year.(Show report on Word Document, as well as compile calculations of the flexible budget report in Excel to compute calculations and explain in detail).
  • Based on the flexible budget report:
    • What was the primary cause(s) of the loss in net income?
    • Did management do a good, average, or poor job of controlling expenses?
    • Were management's decisions to stay competitive sound?
  • What course of action do you recommend for the management of Green Pastures?
  • Conclusion
  • References cited in APA format, including APA citations used. (Provide direct web links of sources used).
  • No plagiarism and will be checked for it.

Complete calculations/computations using Microsoft Excel and show budget report calculations on both Excel and Word Document to explain in detail.

Format the assignment consistent with APA guidelines used for citations and references.

Unformatted Attachment Preview

Green Pastures Static Budget Income Statement ACC/561 Version 7 University of Phoenix Material Green Pastures Static Budget Income Statement For the Year Ended December 31, 2017 Actual Master Budget 52 60 8U 19,000 21,900 2,900 U $380,000 $547,500 $167,500 U Feed 104,390 109,500 5,110 F Veterinary Fees 58,838 65,700 6,862 F Blacksmith Fees 4,984 5,475 491 F Supplies 10,178 12,045 1,867 F Total Variable Expenses 178,390 192,720 14,330 F Contribution Margin 201,610 354,780 153,170 U Depreciation 40,000 40,000 -0- Insurance 11,000 11,000 -0- Utilities 12,000 14,000 2,000 F Repairs and Maintenance 10,000 11,000 1,000 F Labor 88,000 95,000 7,000 F Advertisement 12,000 8,000 4,000 U Entertainment 7,000 5,000 2,000 U Number of Mares Number of Boarding Days Sales Difference Less: Variable Expenses Less: Fixed Expenses Total Fixed Expenses 180,000 184,000 4,000 F Net Income $21,610 $170,780 $149,170 U Copyright © 2017 by University of Phoenix. All rights reserved. 1 ...
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Final Answer



Name of Student
Institution affiliation




Budgeting process involves forecasting future revenues and expenses to prepare financial
statements based on these estimates. Budgeting is planning tools and help the organization in
planning it resource before the actual production occurs.
Based on the inert budget report:
The primary cause of less actual income than the budgeted was sales variance. The
expected sales revenues were less than the budgeted sales revenue by $153,170. This might have
been caused by a lower than budgeted numbers of boarding days and number of Mares. It is
either management was too optimistic about economic conditions and impacts of their aggressive
advertising or the increased marketing strategies were ineffective in generating more sales.
Management did a good job in controlling the variable expenses as all variable expenses
had favourable variances. The cause of the lower expenses than the budgeted...

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