The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs:
Fixed overhead (bases on 10,000 hrs) 3 hrs. per unit @ $0.80 per hr.
Variable overhead 3 hrs. per unit @ $2.00 per hr.
Actual Costs:
Total variable cost $18,000
Total fixed cost $ 8,000
The fixed factory overhead volume variance is:
A. $2,000 unfavorable
B. $5,000 unfavorable
C. $2,500 unfavorable
D. $5,000 favorable
Ans: A. $2,000 unfavorable
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