Anderson Enterprises manufactures tires for the Formula I motor racing circuit. For August $2020,$ it budgeted to manufacture and sell $2,900$ tires at a variable cost of $$80$ per tire and total fixed costs

of $$54,500.$ The budgeted selling price was $$116$ per tire. Actual results in August $2020$ were $2,600$ tires manufactured and sold at a selling price of $$117$ per tire. The actual total variable costs were

$$228,800,$ and the actual total fixed costs were $$50,500.$

Requirement $1.$ Prepare a performance report with 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.$)$

Requirement $2.$ Comment on the results in requirement $1.$

The total static$-$budget variance in operating income is

There is $a(n)$

total flexible$-$budget

variance and $a(n)$

sales$-$volume variance. The sales$-$volume variance arises solely because actual units

manufactured and sold were

than the budgeted $2,900$ units. The flexible$-$budget variance in operating income is due

primarily to the

in unit variable costs.