The information for Ford Motor Company is from the Form 10-Q which is a quarterly report that publicly traded companies must file with the SEC. The column labeled "Plan" is the original budget for the year ending December 31, 2015, which the text called the "Planning Budget". The column labeled "Outlook is the revised budget adjusted based upon actual results for the first half of the year. This is what the text called the "Flexible Budget. The "Memo" column is the actual results for the first half of the year. Given this information, answer the following questions. You do not need to compute the amount of the variances 1. Is the activity variance for U.S. Industry Volume favorable, unfavorable, or none? 2. Is the activity variance for Europe 20 Industry Volume favorable, unfavorable, or none?? 3. Is the activity variance for China Industry Volume favorable, unfavorable, or none? 4. Is the activity variance for Pre-Tax profit favorable, unfavorable, or none? 5. Ford's flexible budget for China Industry Volume was reduced from the original planning budget What two things is Ford doing in response to the lower sales projection? A. B. Business Environment We continue to expect this year to be one of growth globally with GDP expanding in the 2.5% to 3% range. This will be driven by the United States, improved growth in the Euro Area, with the United Kingdom continuing to perform at a lower than in recent years. The U.S. dollar is expected to remain strong against most major currencies, and commodity prices, including oil, are concern are South America, particularly Brazil, and Russia. Low commodity prices and policy uncertainty continue to generate difficult conditions in these markets. We also are closely watching the slower growth in China and ensuring that we continue to respond appropriately to changes in the pricing environment and matching our production with demand. All in all, we now see conditions as being supportive of global automotive industry sales in the 86 million to 89 million unit range in 2015 essentially about flat compared with 2014. higher level, and continued growth in China, although at levels expected to stabilize but remain at low levels. Two areas of 2015 Planning Assumptions and Key Metrics Based on the current economic environment, our planning assumptions and key metrics for 2015 include the following Memo: 2015 2014 2015 Full Year First Half Full Year - Results Plan Outlook Results Planning Assumptions (Mils.) Industry Volume U.S 17.3 15.7 23.8 16.8 17.0 17.5 On Track 15.7 16.2 14.6 24.0 14.8 15.3 24.5 26.5 -- Europe 20 China 23.0 24.0 - Key Metrics Automotive (Compared with 2014): Revenue (Bils.) $ 66.9 $135.8 Higher On Track 3.9% Operating Margin Higher On Track 5.5 % Operating-Related Cash Flow (Bils.) (a) S On Track $ 2.4 3.6 Higher Ford Credit (Compared with 2014): On Track $ - Pre-Tax Profit (Bils.) Equal To Or Higher 1.0 19 Total Company: Pre-Tax Profit (Bils.) (a) On Track S 4.3 6.3 $8.5 $9.5 - - a) Excludes special items, reconciliation to GAAP provided in "Results of Operations and "Liquidity and Capital Resources" above We expect this year to be a very strong one for Ford Motor Company. In terms of industry sales outlook guidance for China. Industry sales in the United States still look to be on track for 17 million to 17.5 we are raising our guidance for Europe 20, while reducing our million units. All of our other financial guidance at the Company level remains on track. We expect growth in Automotive revenue compared with 2014, higher Automotive operating margin, higher positive operating-related cash flow, equal or higher results at Ford Credit, and a total Company pre-tax profit, excluding special items, of $8.5 billion to $9.5 billion We continue to expect our results in the second half of 2015 to be stronger than the first half of the year We expect our operating effective tax rate for the third quarter of 2015 to be about 34 %, and we continue to expect the rate for the full year to be about equal to or higher than our 2014 rate of 26 %. This continues to assume extension of U.S. research credit legislation in the fourth quarter of 2015. We believe our first half 2015 results have us on track for the breakthrough year we expect 2015 to be