2 of 9 (0 complete) ? | | This Quiz: 20 pts p > his Question: 2 pts | MetaPro Sy

Question

2 of 9 (0 complete) ? | | This Quiz: 20 pts p > his Question: 2 pts | MetaPro 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 $9,000 per month. MetaPro's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 70 connectors at a total cost of $18,000. MetaPro's sales volume variance for total costs is OA. $250 U. O B. $3,750 U O C. $3,750 F O D. $250 F

Explanation / Answer

Answer is $3,750 F

Cost formula for Total Costs = $125 * Number of units + $9,000

Planned Number of units produced and sold = 100
Actual Number of units produced and sold = 70

Static Budget Total Cost = $125 * 100 + $9,000
Static Budget Total Cost = $21,500

Flexible Budget Total Cost = $125 * 70 + $9,000
Flexible Budget Total Cost = $17,750

Sales Volume Variance for Total Costs = Static Budget Total Cost - Flexible Budget Total Cost
Sales Volume Variance for Total Costs = $21,500 - $17,750
Sales Volume Variance for Total Costs = $3,750 Favorable

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