Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2018, it budgeted to manufacture and sell 2,700 tires at a variable cost of $72 per tire and total fixed costs of $56,000. The budgeted selling price was $109 per tire. Actual results in August 2018 were 2,200 tires manufactured and sold at a selling price of $111 per tire. The actual total variable costs were $176,000, and the actual total fixed costs were $51,500. Required 1. Prepare a performance report that uses a flexible budget and a static budget. 2. Comment on the results in requirement 1.

Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2018, it budgeted to manufacture and sell 2,700 tres at a variable cost of $72 per tire and total fixed costs of $56,000. The budgeted seling price was $109 per tire. Actual results in August 2018 were 2,200 tires manufactured and sold at a selling price of $111 per tire. The actual total variable costs were $176,000, and the actual total fixed costs were $51,500. Required 1. Prepare a performance report that uses a flexable budget and a static budget. 2. Comment on the rosults in roquirement 1 Requirement 1. Prepare a performance teport that uses a flexible budget and a static budget Bogin with the actual results, and then complete the flexible budget columns and the static budget columns. Label each variance as favourable or unfavourable. (For variances with a $0 balance, make sure to enter "o" in the appropriate field If the variance is zero, do not select a fabel Use parentheses of a minus sign when entering an operating loss.) Requirement 2. Comment on the results in requirement 1 . The total static-budget variance in operating income is $ There is total flexible-budget variance and sales-volume varance: The sales-volume variance arises solely because actual units manufactured and sold were flexible-budget variance in operating income is due primarity to the in und variable costs than the bucigeted units The