The Structure of Budgets Essay

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Static and Flexible BudgetsStatic BudgetThe primary causes of the loss in net income were linked to the decline in the number of boarding days and also the decrease in the boarding fee. Imperatively, it can be noted that there was a decline in the number of boarding days by 2,900. In addition, the boarding fee declined from $25 to $20 daily. Consequently, this resulted in a decline in sales of:(167,500 / 547,500) * 100 = 31 percentTaking this into consideration, I believe that the management did a poor job with respect to controlling the variable expenses. Taking into account that the boarding days declined by 13 percent, that is (2,900 / 21,900) * 100 = 13, there was also a diminishing impact on the variable expenses. The inference of this is that the management indeed did a poor job in controlling variable expenses. In contrast, management did a good job with respect to controlling fixed costs. This is for the reason that the fixed expenses incurred were below the budgeted amount by $4,000 together with the extra costs incurred for advertising and entertainment.

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The decisions made by management in order to remain competitive in the market were probable sensible and rational. Taking into account the…

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…for the management of Green Pastures is to conduct the observation and monitoring of the cash flow and the plan. Basically, within a business that is successful, the cycle of the cash flow starts with cash utilized to attain resources and culminates in the collection of payments, with some of the revenue being invested yet again into the business itself or invested in new assets and resources. It is imperative to note that controlling costs is a challenging and daunting task and therefore should be highly considered. Therefore, it implies that there is room for improvement in terms of controlling costs to enable Green….....

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