Carlson Enterprises manufactures tires for the Formula 1 motorracing circuit. For August 2017?,

it budgeted to manufacture and sell 3,300 tires at a variablecost of $72 per tire and total fixed costs of $53,000.The budgetedselling price was $110 per tire. Actual results in August 2017 were3,200 tires manufactured and sold at a selling price of $112

per tire. The actual total variable costs were $256,000?,

and the actual total fixed costs were $48,000.

Requirement 1. Prepare a performance report that uses a flexiblebudget and a static budget.

Begin with the actual? results, then complete the flexiblebudget columns and the static budget columns. Label each varianceas favorable or unfavorable.? (For variances with a? $0 balance,make sure to enter? "0" in the appropriate field. If the varianceis? zero, do not select a? label.)

	Actual
	Results
Units sold
Revenues
Variable costs
Contribution margin
Fixed costs
Operating income

Flexible-Budget		Flexible
Variances		Budget

Sales-Volume		Static
Variances		Budget

Requirement 2. Comment on the results in requirement 1.

The total static-budget variance in operating income is $						There is a(n)		total flexible-budget
variance and a(n)			sales-volume variance. The sales-volume variance arises solelybecause actual units
manufactured and sold were			than the budgeted 3,300 units. The flexible-budget variance inoperating income is due
primarily to the			in unit variable costs.