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  3. scenario: green pastures is a 400-acre farm on the

Scenario: Green Pastures is a 400-acre farm on the outskirts of the Kentucky Bluegrass, specializing...

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Accounting

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 2020 to entertain clients, advertise more extensively, and absorb expenses formerly paid by clients such as veterinary and blacksmith fees. The budget report for 2020 is presented as an attachment. As shown, the static income statement budget for the year is based on an expected 22,800 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. 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.

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prepare a flexible budget report for the year (list variable cost before fixed cost)

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Sales Less: Variable expenses Sales Less: Variable expenses

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