ProNet Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $105 for eachconnector and fixed costs of $8,000 per month. ProNet's static budget predicted production and sales of 100 connectors in August, but the company actuallyproduced and sold only 72 connectors at a total cost of $24,000.ProNet's sales volume variance for total costs isA. $8,440 F.B. $2,940 U.C. $2,940 F.O D. $8,440 U.

Variance refers to the difference in the actual cost incurred and standard cost. The variance can be…

Answered: ProNet Systems is a start-up company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ProNet Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $115 for each connector and fixed costs of $6,500 per month. ProNet's static budget productions and sales of 100 connectors in August, but the company actually produced and sold 77 connectors at a total cost of $19,000. ProNet's flexible budget variance for total costs is A. 2,645 F. B. $3,645 F. C.$2,645 U. D. $3,645 U. C. D.
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Grady, Inc. manufactures model airplane kits. Direct materials are four ounces of plastic per kit and the plastic costs $1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. The company has prepared the following budgets: (Click the icon to view the budgets.) Grady projects sales of 100, 150, 100, and 200 kits for the next four quarters. Grady has no kits in beginning inventory. Determine the cost per kit to manufacture the model airplane kits. Prepare a cost of goods sold budget for the year. Round amounts to two decimal places. X Determine the cost per kit to manufacture the model airplane kits. (Round your answers to two decimal places, SX.XX.) $ 1.00 4.00 0.50 5.50 Direct labor cost per kit Direct materials cost per kit Manufacturing overhead cost per kit $ Total…

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