7-21 Flexible budget. Brabham Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,000 tires at a variable cost of $73 per tire and total fixed costs of $57,000. The budgeted selling price was $111 per tire. Actual results in August 2020 were 2,700 tires manufactured and sold at a selling price of $113 per tire. The actual total variable costs were $218,700, and the actual total fixed costs were $53,500. 1. Prepare a performance report (akin to Exhibit 7-2, page 249) with a flexible budget and a static budget. 2. Comment on the results in requirement 1. 7-22 Flexible budget. Bryant Company's budgeted prices for direct materials, direct manufacturing la- bor, and direct marketing (distribution) labor per attach case are $43, $6, and $13, respectively. The presi- dent is pleased with the following performance report: Direct materials Direct manufacturing labor Direct marketing (distribution) labor Actual Costs Static Budget $438,000 $473,000 Variance $35,000 F 63,600 66,000 2,400 F 133,500 143,000 9,500 F Actual output was 10,000 attach cases. Assume all three direct-cost items shown are variable costs. Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget. 8-21 Variable manufacturing overhead, variance analysis. Esquire Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manu- facturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2020, each suit is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $12. The budgeted number of suits to be manufactured in June 2020 is 1,040. Actual variable manufacturing costs in June 2020 were $52,164 for 1,080 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,536. 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. 2. Comment on the results. 8-22 Fixed manufacturing overhead, variance analysis (continuation of 8-21). Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2020 are budgeted, $62,400, and actual, $63,916. 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results. 2. Compute the production-volume variance for June 2020. What inferences can Esquire Clothing draw from this variance?