Chapter 23, Problem 1QC

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 $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.

MajorNet’s total flexible budget cost for 84 connectors per month is

1. a. $14,500.
2. b. $12,180.
3. c. $19,680.
4. d. $21,000.