Question 4 Fast & Furious Enterprises manufactures tires for the Formula I motor racing circuit. For August 2018, it budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire and total fixed costs of $54,000. The budgeted selling price was $110 per tire. Actual results in August 2018 were 2,800 tires manufactured and sold at a selling price of $112 per tire. The actual total variable costs were $229,600, and the actual total fixed costs were $50,000. Required 1. Prepare a performance report (akin to Exhibit 7-2, p. 231) that uses a flexible budget and a static budget. 2. Comment on the results in requirement 1.
Question 4 Fast & Furious Enterprises manufactures tires for the Formula I motor racing circuit. For August 2018, it budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire and total fixed costs of $54,000. The budgeted selling price was $110 per tire. Actual results in August 2018 were 2,800 tires manufactured and sold at a selling price of $112 per tire. The actual total variable costs were $229,600, and the actual total fixed costs were $50,000. Required 1. Prepare a performance report (akin to Exhibit 7-2, p. 231) that uses a flexible budget and a static budget. 2. Comment on the results in requirement 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 4
Fast & Furious Enterprises manufactures tires for the Formula I motor racing circuit.
For August 2018, it budgeted to manufacture and sell 3,000 tires at a variable cost of
$74 per tire and total fixed costs of $54,000. The budgeted selling price was $110 per
tire. Actual results in August 2018 were 2,800 tires manufactured and sold at a selling
price of $112 per tire. The actual total variable costs were $229,600, and the actual
total fixed costs were $50,000.
Required
1. Prepare a performance report (akin to Exhibit 7-2, p. 231) that uses a
flexible budget and a static budget.
2. Comment on the results in requirement 1.
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