Green pastures is a 400 acre farm on the outskirts ofthe Kentucky bluegrass,specializing in the boarding of broodmaresand their foals. A recent economic downturn in the thoroughbredindustry has led to a decline in breeding activities, and it hasmade the boarding business extremely competitive. To meet thecompetition, Green pastures planned in 2017 to entertain clientsadvertise more extensively an absorb expenses formerly paid byclients such as veterinary and blacksmith fees. The budgetreportfor 2017 is presented as an attachment as shown, the static incomestatement budget for the year is based on an expected 21,900boarding days at $25 per mar. The variable expenses per mar per daywere budgeted: feed $5, veterinary fees $3, blacksmith fees $0.25,and supplies $0.55. All other budgeted expenses were eithersemifixed or fixed. During the year management decided not toreplace a worker who quit in March, but did issue a new advertisingbrochure and did more entertaining of clients. Develop a minimum of700 word examination of the financial statements and include thefollowing:

based on the static budget report:
* what was the primary causes of the loss in net income
* did management do a good job, average, or poorjob of controllingexpenses?
* were managements decision to stay competitive sound?

prepare a flexible budget report for theyear

based on the flexible budget report:
* what was the primary causes of the loss in net income?
* did management do a good job, average, or poor job of controllingexpenses?
* were managements decisions to stay competitive sound?

what course of action do you recommend for themanagement of Green Pastures.