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

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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.
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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 don’t, you can loose the business very quickly....
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This note was uploaded on 09/20/2011 for the course ACCT 221 taught by Professor Prof during the Spring '10 term at Alabama State University.

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