(SOLVED) Abulafia Srl manufactures tyres for the Formula 1 motor racing


Question Description:

$19

Abulafia Srl manufactures tyres for the Formula 1 motor racing circuit. For August 2008, Abulafia budgeted to manufacture and sell 3000 tyres at a variable cost of €74 per tyre and a total fixed cost of €54 000. The budgeted selling price was €110 per tyre. Actual results in August 2008 were 2800 tyres manufactured and sold at a selling price of €112 per tyre. The actual total variable costs were €229600, and the actual total fixed costs were €50000.
Required
1. Prepare a performance report (akin to Exhibit 15.3) that uses a flexible budget and a static budget.
2. Comment on the results in requirement 1.

Answer

$19