1.	Prepare a performance report that uses a flexible budget and a static budget.
2.	Comment on the results in requirement 1.

Walsh Enterprises manufactures tires for the Formula 1 motor racing circuit. For August

2017, it budgeted to manufacture and sell 3,200 tires at a variable cost of $74 per tire and total fixed costs of

$55,500.

The budgeted selling price was $ 112 per tire. Actual results in August 2017 were

3,100 tires manufactured and sold at a selling price of $115 per tire. The actual total variable costs were

$248,000, and the actual total fixed costs were $51,000.

Requirement 1. Prepare a performance report that uses a flexible budget and a static budget.

Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.)

	Actual
	Results
Units sold
Revenues
Variable costs
Contribution margin
Fixed costs
Operating income