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of $ 5 4 , 5 0 0 . The budgeted selling price was $ 1 1 6 per tire. Actual results in August 2

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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.
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