please explain the answer s 1-4 rely on the following data. Questions rNet Syste
ID: 2569594 • Letter: P
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please explain the answer
s 1-4 rely on the following data. Questions rNet Systems is a start-up company that makes connectors for high-speed Internet Majori ections. The company has budgeted variable costs of $145 for each connector and ixed costs of $7,500 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 $21,000. 1. MajorNet's total flexible budget cost for 84 connectors per month is a. $14,500. b. $12,180. C. $19,68 d. $21,000. 2. MajorNet's sales volume variance for total costs is a. $1,320 U. b. $1,320 F. d. $2,320 F 3. MajorNet's flexible budget variance for total costs is a. $1,320 U. b. $1,320 F c. $2,320 U d. $2,320 FExplanation / Answer
1
Flexible budget cost for 84 connectors
Particulars
Amount
Variable cost ($145*84)
$12,180
Fixed cost
$7,500
Ans
Total Cost
$19,680
Option (C) $19,680 is correct
2
Sales volume variance
Actual sales units
84
Standard sales units
100
Difference in sales units
-16
Variable cost per unit
$145
Variance (unfavourable)
($2,320)
Ans
Variance (unfavourable)
($2,320)
Option (C) 2,320 U is correct
3
Flexible budget total cost variance
Total Actual cost
$21,000
Standard Total Cost
$19,680
Variance (unfavourable)
$1,320
Option (a) 1,320 U is correct
1
Flexible budget cost for 84 connectors
Particulars
Amount
Variable cost ($145*84)
$12,180
Fixed cost
$7,500
Ans
Total Cost
$19,680
Option (C) $19,680 is correct
2
Sales volume variance
Actual sales units
84
Standard sales units
100
Difference in sales units
-16
Variable cost per unit
$145
Variance (unfavourable)
($2,320)
Ans
Variance (unfavourable)
($2,320)
Option (C) 2,320 U is correct
3
Flexible budget total cost variance
Total Actual cost
$21,000
Standard Total Cost
$19,680
Variance (unfavourable)
$1,320
Option (a) 1,320 U is correct
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