Problem 11-39 Budgets and Performance Evaluation (LO 11-1, 11-6) Johnson Electrical produces Industrlal ventllation fans. The company plans to manufacture 87,000 fans evenly over the next quarter at the following costs: direct materlal, \$1,914,000; direct labor, \$435,000; variable production overhesd, \$639,450; and flixed production overnead, $966,000. The $966,000 amount includes $84,000 of stralght-llne depreclation and $126,000 of supervisory salarles. Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: 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 especlally pleased with the fact that overall financlal performance for the period was favorable when compared with the budget. His pleasure, however, was very short-lived, as Johnson's general manager lssued 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? 3. Prepare a performance report that compares static budget and actual costs for the perlod just ended (1.e., the report that Kellerman Ilkely used when assessing his performance). 4. Prepare a performance report that compares flexible budget and actual costs for the perlod just ended (l.e., the report that the general manager llkely used when assessing Kellerman's performance). 5-a. Which of the following two reports is preferred? 5-b. Which of the following statements is false? Complete this question by entering your answers in the tabs below. Prepare a performance report that compares static budget and actual costs for the period fust ended (l.e., the report that Kellerman likely used when assessing his performance). (Indicate the effect af esch variance by selecting "Favorable" ar "Unfavorable". Select. "Nane" and enter " 0 " for no effect (I.e., zero variance). Do nat round intermediate calculations.]