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Subject
Accounting
School
University of Phoenix
Type
Homework
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Surname 1
Name
Instructor
Course
Date
Answer 1:
The main reason for low net income was that the boarding days has reduced in comparison to
projected number. The master budget was organized under the presuming that there will be
21,900 boarding days while the actual numbers were 19,000 which is 2,900 less than the budget.
The actual boarding fees also reduced considerably as compared to budgeted. The budgeted fee
was presume to be $25 per boarding day ($547,500/21,900) which reduced to $20 per boarding
day ($380,000/$19,000).
Answer 2:
The management did not perform well in governing the variable expenses but perform well in
managing fixed expenses. The reduction in variable expenses was $14,330($192,720-178,390))
which shows that the management was unable to reduce the variable expenses in the equivalent
amount as the reduction in the number of boarding days. The management controlled the fixed
expenses very well. The planned fixed expenses were $184,000 while the actual fixed expenses

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Surname 2
were $180,000. Which shows that the actual fixed expenses were fewer than $4,000 in compared
to projected fixed expenses.
Answer 3:
The management decision of competitiveness was decent and sound. One of the decisions was to
decrease the boarding fees. This decision might have taken by considering the strong competition
and dominant slump in the economy. The other verdict of the management like not to substitute
the workers those leave in March was also sound due to this expenses was decreased and was
cost saved.
Answer 4:
Flexible budget report
Budgeted at
19,000
Actual at 19,000
Variance
Favorable or
Unfavorable
Sales
475,000
380,000
95,000
Unfavorable
Feed
95,000
104,390
9,390
Unfavorable
Veterinary fees
57,000
58,838
1,838
Unfavorable
Blacksmith fees
4,750
4,984
234
Unfavorable
Supplies
10,450
10,178
272
Favorable

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Surname 1 Name Instructor Course Date Answer 1: The main reason for low net income was that the boarding days has reduced in comparison to projected number. The master budget was organized under the presuming that there will be 21,900 boarding days while the actual numbers were 19,000 which is 2,900 less than the budget. The actual boarding fees also reduced considerably as compared to budgeted. The budgeted fee was presume to be $25 per boarding day ($547,500/21,900) which reduced to $20 per boarding day ($380,000/$19,000). Answer 2: The management did not perform well in governing the variable expenses but perform well in managing fixed expenses. The reduction in variable expenses was $14,330($192,720-178,390)) which shows that the management was unable to reduce the variable expenses in the equivalent amount as the reduction in the number of boarding days. The management controlled the fixed expenses very well. The planned fixed expenses were $184,000 while the actual fixed expenses Surname 2 were $180,000. Which shows that the actual fixed expenses were fewer than $4,000 in compared to projected fixed expenses. Answer 3: The management decision of competitiveness was decent and sound. One of the decisions was to decrease the boarding fees. This decision might have taken by considering the strong competition and dominant slump in the economy. The other verdict of the management like not to substitute the workers those leave in March was also sound due to this expenses w ...
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