Question

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

Answer 1

Volume variance $2,875 favorable

Step-by-step 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