Applet Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 130 for each connector and fixed costs of $ 4,500 per month. Applet 's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 72 connectors at a total cost of $ 19,000.

Applet's flexible budget variance for total costs is:

Applet's flexible budget variance for total costs is $5,140 unfavorable variance since actual is higher than budgeted cost

Explanation:

Flexible budget variance for total costs=actual total costs-budgeted total costs of 72 connectors

actual total costs of 72 connectors=$19,000

budgeted total costs of 72 connectors=budgeted fixed cost+budgeted total variable cost of 72 connectors

total budgeted variable cost=72*$130=$ 9,360.00

budgeted fixed cost is $4,500

Budgeted total costs of 72 connectors=$9,360.00+$4,500.00=$ 13,860.00

Flexible budget variance = $ 13,860.00-$19,000.00=$5140 unfavorable variance