Anderson Enterprises manufactures tires for Formula 1 racing. Their August 2020 budget projected manufacturing 3,700 tires at $70 variable cost per tire and $53,000 fixed costs, selling each for $108. Actual results saw 3,500 tires made and sold at $110 each, with $266,000 variable costs and $50,500 fixed costs. Performance against flexible and static budgets will be reported, with variances labeled as favorable or unfavorable.

1. Anderson Enterprises manufactures tires for the Formula I motor racing circuit. For August
2020, it budgeted to manufacture and sell 3,700 tires at a variable cost of $70 per tire and total
fixed costs of $53,000. The budgeted selling price was $108 per tire. Actual results in August
2020 were 3,500 tires manufactured and sold at a selling price of $110 per tire. The actual total
variable costs were $266,000, and the actual total fixed costs were $50,500.
Requirements
1.
Prepare a performance report with a flexible budget and a static budget.
2.
Comment on the results in requirement 1.
Begin with the actual results, then complete the flexible budget columns and the static budget
columns. Label each variance as favorable or unfavorable.
1.
Prepare a performance report with a flexible budget and a static budget.
2.
Comment on the results in requirement 1.