CASE 1 CASE 2 Montana Farm is a 400-acre farm on the outskirts of San Bernardino Plains,

CASE 1
CASE 2

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Montana Farm is a 400-acre farm on the outskirts of San Bernardino Plains, one of the major suppliers free range eggs in the country. A recent breakout of bird flu in the Asia pacific region has affected the industry amid health concerns which has led to a decline with the demand, and it has made the business extremely competitive. To meet the competition, Montana Farm planned in 2017 to advertise more extensively, boost health of laying hens with regular monitoring of veterinary specialists and sourcing grain from trusted suppliers. The budget report for 2017 is presented below. As shown, the static income statement budget for the year is based on an expected 69,000 laying hens producing 568,100 dozen of eggs at $3.95 per dozen. The variable expenses were budgeted as follows: Per laying hen: feed $1.05, nutrition $0.12, supplies $0.06 Per dozen eggs produced: delivery $0.30 All other budgeted expenses were either fixed or mixed expenses. During the year, management decided not to replace a farm hand who quit in March, but it did issue a new advertising brochure and paid for more promotion and advertising. Montana Farm is a 400-acre farm on the outskirts of San Bernardino Plains, one of the major suppliers free range eggs in the country. A recent breakout of bird flu in the Asia pacific region has affected the industry amid health concerns which has led to a decline with the demand, and it has made the business extremely competitive. To meet the competition, Montana Farm planned in 2017 to advertise more extensively, boost health of laying hens with regular monitoring of veterinary specialists and sourcing grain from trusted suppliers. The budget report for 2017 is presented below. As shown, the static income statement budget for the year is based on an expected 69,000 laying hens producing 568,100 dozen of eggs at $3.95 per dozen. The variable expenses were budgeted as follows: Per laying hen: feed $1.05, nutrition $0.12, supplies $0.06 Per dozen eggs produced: delivery $0.30 All other budgeted expenses were either fixed or mixed expenses. During the year, management decided not to replace a farm hand who quit in March, but it did issue a new advertising brochure and paid for more promotion and advertising.

Answer rating: 100% (QA)

a Based on the static budget report Primary Causes of Loss in Net Income The primary causes of the loss in net income can be identified by comparing the actual performance against the static budget Fr... View the full answer