HW Score: 43.69%, 1.31 of 3 pts Exercise 7-16 (similar to) Question Help Kluver Enterprises manufactures tires for the Formulai motor racing circuit For August 2018, it budgeted to manufacture and sell 3,300 tires at a variable cost of $79 perture and total food costs of $54,000. The budgeted selling price was $115 per tire. Actual results in August 2018 were 3,000 tires manufactured and sold at a selling price of $119 per lire. The actual total variable costs were $261,000, and the actual total fixed costs were $51,000 Required 1. Prepare a performance report that uses a flexible budget and a static budget 2. Comment on the results in requirement 1 Requirement 1. Prepare a performance report that uses a flexible budget and a static budget Begin with the actual results, and then complete the flexible budget columns and the static budget columns Label each variance as faryourable or unfavourable For variances with a 50 balance, make sure to enter in the appropriate field. If the variance is zero, do not select a label Use parentheses or a minus sign when entering an operating loss.) $ Actual Flexible-Budget Results Variances Units sold 3,000 Revenues $ 357,000 $ 12,000 F 261 000 24.000 U Variable costs Contribution margin 96,000 12,000 U 51,000 3.000 F Fixed costs 45000 $ 9.000 Operating income Requirement 2. Comment on the results in requirement 1 Flexible Sales Volume Budget Variances 3.000 300 U 345,000 $ 34,500 U $ 237,000 23,700 Ft 108,000 10.800 U 54000 54000 $ 10800 $ Static Budget 3 300 379,500 260 700 118 800 54 000 64.800 0 $ The total static-budget variance in operating income is $64800 U There is an unfavourable total flexible-budget variance and a favourable sales volume variance. The sales volume variance anses solely because actual units manufactured and sold were more than the budgeted units. The flexible-budget variance in operating income is de primary to the decrease in unit variable costs