Kluver Enterprises manufactures tires for Formula 1 racing. In August 2017, it budgeted to produce 3,700 tires at $74 per tire in variable costs and $52,500 in fixed costs, planning to sell tires at $116 each. Actual production was 3,500 tires sold at $120 each, with $287,000 in variable costs and $50,000 in fixed costs. A performance report is required comparing actuals to the flexible and static budgets, labeling variances as favorable or unfavorable. Commentary is also needed on the budget variances.