Problem
Kluver Enterprises manufactures tires for the Formula 1 motor racing circuit. For August 2014?,it budgeted to manufacture and sell 3,100 tires at a variable cost of $73 per tire and total fixed costs of $53,000. The budgeted selling price was $110 per tire. Actual results in August 2014 were 2,900 tires manufactured and sold at a selling price of $113 per tire. The actual total variable costs were $237,800?, and the actual total fixed costs were $48,500.
Requirements
1. Prepare a performance report that uses a flexible budget and a static budget.
2. Comment on the results in requirement 1.