Connolly Enterprises manufactures tires for the Formula 1 motor racing circuit. For August 2017, it budgeted to manufacture and sell 3,200 tires at a variable cost of $78 per tire and total fixed costs of $53,000. The budgeted selling price was $107 per tire. Actual results in August 2017 were 2,900 tires manufactured and sold at a selling price of $109 per tire. The actual total variable costs were $249,400, and the actual total fixed costs were $49,000.
Requirement 1:
Prepare a performance report that uses 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