Salvatore Transportation Company's general manager reports quarterly to the company president on the firm's operating performance. The company uses a budget based on detailed expectations for the forthcoming quarter. The general manager has just received the condensed quarterly performance report shown below. (Click the icon to view the quarterly performance report.) Data table U= Unfavorable. F= Favorable "For purposes of this analysis, assume that all these costs are totally variable with respect to sales revenue. In practice, many are mixed and have to be subdivided into variable and fixed components before a meaningful analysis can be made. Also, assume that the prices and mix of services sold remain unchanged. Although the genera.nanager was upset about not obtaining enough revenue, she was happy that her cost performance was favorable; otherwise, her net income would be even worse. The president was not satisfied with the performance report and remarked, "I can see some merit in comparing actual performance with budgeted performance becase we can see whether actual revenue coincided with our best guess for budget purposes. But I can't see how this performance report helps me evaluate cost-control performance." Read the requirements. Requirements 1. Prepare a columnar flexible budget for Salvatore Transportation at revenue levels of $9,800,000,$10,000,000, and $10,200,000. Assume that the prices and mix of products sold are equal to the budgeted prices and mix. 2. Write out the flexible budget formula for costs as a function of revenue. 3. Prepare a condensed table showing the static budget variance, the sales-activity variance, and the flexible-budget variance. saivatore iransportation ompany