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Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,100 tires at a variable cost of $80 per tire and total fixed costs of $52,000. The budgeted selling price was $110 per tire. Actual results in August 2020 were 2,900 tires manufactured and sold at a selling price of $114 per tire. The actual total variable costs were $255,200, and the actual total fixed costs were $48,000. Read the requirements. Requirement 1. Prepare a performance report with 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. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results

Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,100 tires at a variable cost of $80 per tire and total fixed costs of $52,000. The budgeted selling price was $110 per tire. Actual results in August 2020 were 2,900 tires manufactured and sold at a selling price of $114 per tire. The actual total variable costs were $255,200, and the actual total fixed costs were $48,000. Read the requirements. Requirement 1. Prepare a performance report with 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. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 25E: Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000...
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Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,100 tires at a variable cost of $80 per tire and total fixed costs of $52,000. The budgeted selling price was $110 per tire. Actual results in August 2020 were 2,900 tires manufactured and sold at a selling price of $114 per tire. The actual total variable costs were $255,200, and the actual total fixed costs were $48,000. Read the requirements Requirement 1. Prepare a performance report with 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. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results
Transcribed Image Text:Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,100 tires at a variable cost of $80 per tire and total fixed costs of $52,000. The budgeted selling price was $110 per tire. Actual results in August 2020 were 2,900 tires manufactured and sold at a selling price of $114 per tire. The actual total variable costs were $255,200, and the actual total fixed costs were $48,000. Read the requirements Requirement 1. Prepare a performance report with 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. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results
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Performance report is the one which is prepared to measure the differences between the actual and flexible budget, and flexible and static budget.

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