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Flexible budget: Brabham Enterprises

Brabham Enterprises manufactures tires for the Formula I motor racing circuit. For August 2012, 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 2012 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.

1. Prepare a performance report that uses a flexible budget and a static budget.
2. Comment on the results in requirement 1.

Solution Preview

See Excel for performance report showing static budget, flexible budget, actual spending and variances. Click in cells to see computations to ...

Solution Summary

See Excel for performance report showing static budget, flexible budget, actual spending and variances. Click in cells to see computations to guide you.

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