Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 125 for each connector and fixed costs of $ 4 comma 500 per month. ExpertNet 's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 77 connectors at a total cost of $ 26 comma 000. ExpertNet 's sales volume variance for total costs is

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Business

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6 October, 06:39

Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 125 for each connector and fixed costs of $ 4 comma 500 per month. ExpertNet 's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 77 connectors at a total cost of $ 26 comma 000. ExpertNet 's sales volume variance for total costs is

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Kristin Cline · Answer 1

Volume variance $2,875 favorable

Explanation:

The volume variance is the difference between the standard cost of the budgeted production units and the actual cost of the actual production units.

$

Standard cost of 100 units:

= 4,500 + (100 * 125) 17,000

Actual cost for 77 units (4,500 + (77 * 125) = 14,125

Volume variance 2,875 favorable