Project2(C) - 2. To be in an unfavorable situation shows...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Part C 1. The primary cause of loss in net income is that management did not budget enough for feed, vet fees, and blacksmith. The company spent more on advertising and entertaining that was over budgeted by $6000. Add: Net sales were lower than it was expected for the boarding of 52 mares. The company should have sales $94 000 higher. The error of management was decision to charge $20 ($379 600/18 980 = $20) per day for boarding instead of $25 per day. + what you have written about variable costs.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 2. To be in an unfavorable situation shows that management did a poor job of controlling expenses. If they knew they were going to advertise and entertain more, than they should have budgeted accordingly. 3. A business needs to stay competitive at all times. There should be a department or person who calls around to other stables and does a price check or comparison shopping to make sure they are staying competitive. If you dont, you can loose the business very quickly....
View Full Document

Ask a homework question - tutors are online