MajorNet Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 145 for each connector and fixed costs of $ 7 comma 500 per month. MajorNet 's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 84 connectors at a total cost of $ 21 comma 000. MajorNet 's sales volume variance for total costs is

Question

Business

Austin Cunningham

8 March, 03:07

MajorNet Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 145 for each connector and fixed costs of $ 7 comma 500 per month. MajorNet 's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 84 connectors at a total cost of $ 21 comma 000. MajorNet 's sales volume variance for total costs is

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Answers (1)

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Ross Meyer · Answer 1

2,320 F

Explanation:

The computation of the sales volume variance is shown below:

= 16 connectors * $145

= 2,320 F

The 16 connectors is come from

= 100 connectors - 84 connectors

= 16 connectors

Since the budgeted production volume is of 100 connectors and the actual one is 84 connectors so in this case the budgeted one is greater that results into favorable variance