Reference no: EM132930329

In September, Larson Inc. sold 41,500 units of its only product for $405,000, and incurred a total cost of $375,000, of which $40,000 was fixed costs. The flexible budget for September showed total sales of $450,000. Among variances of the period were: total variable cost flexible-budget variance, $9,500U; total flexible-budget variance, $78,000U; and, sales volume variance, in terms of contribution margin, $42,000U.

Problem 1: The budgeted fixed cost for September, to the nearest dollar, was:

Multiple Choice

Option 1: $46,500.

Option 2: $87,500.

Option 3: $108,000.

Option 4: $16,500.

Option 5: $138,000.