Smith Enterprises manufactures tires for the Formula 1 motor racing circuit. For August 2017, it budgeted to manufacture and sell 3 comma 700 tires at a variable cost of $ 76 per tire and total fixed costs of $ 54 comma 000. The budgeted selling price was $ 108 per tire. Actual results in August 2017 were 3 comma 400 tires manufactured and sold at a selling price of $ 110 per tire. The actual total variable costs were $ 282 comma 200, and the actual total fixed costs were $ 50 comma 500.

1. Prepare a performance report that uses a flexible budget and a static budget.

2. Comment on the results in requirement 1.