During November, Glime Company allocated overhead to products at the rate of $26.00 per direct labor hour. This figure was based on 80% of capacity or 1,600 direct labor hours. However, Glime Company operated at only 70% of capacity, or 1,400 direct labor hours. Budgeted overhead at 70% of capacity is $38,900, and overhead actually incurred was $38,000. What is the company's volume variance for November? (Indicate whether the variance is favorable or unfavorable)
What will be an ideal response?
| Overhead budgeted at operating level achieved Standard overhead charged to production …… | $38,900 |
| (1,400 hours ? $26.00 per hour) ……………… | 36,400 |
| Volume variance …………………………….. | $ 2,500 U |
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