Flexible budget. (20-30 minutes) Abulafia, Srl, manufactures tyres for the Formula 1 motor racing circuit. For August 2000, Abulafia budgeted to manufacture and sell 3,000 tyres at a variable cost of Lit 74,000 per tyre and a total fixed cost of Lit 54 million. The budgeted selling price was Lit 110,000 per tyre. Actual results in August 2000 were 2,800 tyres manufactured and sold at a selling price of Lit 112,000 per tyre. The actual total variable costs were Lit 229.6 million, and the actual total fixed costs were Lit 50 million.  huy6 REQUIRED 1. Prepare a performance report (akin to Exhibit 15-3) that uses a flexible budget and a static budget.

2. Comment on the results in requirement 1.