MajorNet Systems is a start-up company that makes connectors for high-speed Inte

Question

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 S7.500 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. MajorNet's total flexible budget cost for 84 connectors per month is $14,500. $ 12,180. $19,680. $21,000. MajorNets sales volume variance for total costs is a. $1.320 U. $1.320 F. $2.320 U. $2.320 F MajorNet's flexible budget variance for total costs is a. 51.320 U. c. 52.320 U. b. 51.320 F. d. 52.320 F 4. MajorNct Systcmss managers could set direct labor standards based on time-and-motion studies. benchmarking. continuous improvement. All of the above.

Explanation / Answer

1. MajorNet's total flexible budget cost for 84 connections is (84 x 145) + 7,500 = $ 19,680.

Option c. is the correct answer.

2. MajorNet's sales volume variance for total costs is (16 x 145) = 2,320U

Therefore, option c. is the correct answer.

3. MajorNet's flexible budget variance for total costs is (19,680-21,000) = $ 1,320 U

Option a . is the correct answer.

4.MajorNet Systems's managers could set direct labor standards based on d. All of the above.

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