Midwest Ventilation, Inc., produces industrial ventilation fans. The company plans to manufacture 87,000 fans evenly over the next quarter at the following costs: direct material, $1,914,000; direct labor, $435,000; variable production overhead, $639,450; and fixed production overhead, $966,000. The fixed-overhead amount includes $84,000 of straight-line depreciation and $126,000 of supervisory salaries Shortly after the conclusion of the quarter's first month, Midwest reported the following costs $ 619,700 134,400 217,000 28,000 44,900 250,000 Direct material Direct labor Variable production overhead Depreciation Supervisory salaries Other fixed production overhead $1,294,000 Dave Kellerman and his crews turned out 26,000 fans during the month-a remarkable feat given that the firm's manufacturing plant was closed for several days because of storm damage and flooding Kellerman was especially pleased with the fact that overall financial performance for the period was favorable when compared with the budget. His pleasure, however, was very short-lived, as Midwest's general manager issued a stern warning that performance must improve, and improve quickly, if Kellerman had any hopes of keeping his job Required: 2. Which of the two budgets would be more useful when planning the company's cash needs over a range of activity? Flexible Budget Static Budget 3. Prepare a performance report that compares budgeted and actual costs for the period just ended (i.e., the report that Kellerman likely used when assessing his performance). (Indicate the effect of each variance by selecting "Favorable" or r"Of" for no effect (i.e., zero Static Budget: 29,000 Units Actual: 26,000 Units Variance Total