I already have the solution for this. I just need help understanding how to work the problem. PLEASE answer as thoroughly as possible. Please try to label steps and all formulas needed. Thank you so so much.

13-11 Flexible budget. Connolly Enterprises manufactures tires for the Formula 1 motor racing circuit. For August 2013, it budgeted to manufacture and sell 3,500 tires at a variable cost of $75 per tire and total fixed costs of $56,500. The budgeted selling price was $112 per tire. Actual results in August 2013 were 3,400 tires manufactured and sold at a selling price of $113 per tire. The actual total variable costs were $278,800 and the actual total fixed costs were $51,500. 1. Prepare a performance report (akin to Exhibit 13-2, page 540) that uses a flexible budget and a static budget. 2. Comment on the results in requirement 1