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 conectors per month is
(a) $14,500.
(b) $12,180.
(c) $19,680.
(d) $21,000.

$ 12180

Explanation:

Given data in the problem:

Variable cost for each connector = $ 145

Fixed cost per month = $ 7500

Predicted production and sales = 100 connectors

Actual production and sales = 84 connectors

Total cost of the connectors = $ 21000

Now,

The total flexible budget cost for 84 connectors is calculated as:

= 84 × variable cost

or

The total flexible budget cost for 84 connectors = 84 × $ 145

or

The total flexible budget cost for 84 connectors = $ 12180

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