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 $ 4 comma 500 per month. ExpertNet's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 77 connectors at a total cost of $ 26 comma 000. ExpertNet's sales volume variance for total costs is

Volume variance  $2,875  favorable

Explanation:

The volume variance is the difference between the standard cost of the budgeted production units and the actual cost of the actual production units.

                                                                                                       $

Standard cost of 100 units:

=  4,500 + (100× 125)                                                                17,000

Actual cost for 77 units ( 4,500 + (77× 125) =                         14,125

Volume variance                                                                     2,875  favorable

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