The following information is available for the Danske Company: Denominator hours for May 15,000 Actual hours worked during May 14,000 Standard hours allowed for May 12,000 Flexible budget fixed overhead cost$45,000 Actual fixed overhead costs for May$48,000 Danske Company had total underapplied overhead of $15,000. Additional information is as follows: Variable Overhead: Applied based on standard direct labor hours allowed$42,000 Budgeted based on standard direct labor hours 38,000 Fixed Overhead: Applied based on standard direct labor hours allowed$30,000 Budgeted based on standard direct labor hours 27,000 Is the production volume variance favorable or unfavorable?
A. Unfavorable.
B. Favorable.
Answer: A
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