The standard variable overhead cost rate for Harris Manufacturing is $24 per unit. Budgeted fixed overhead cost is $42,000. Harris Manufacturing budgeted 3,800 units for the current period and actually produced 3,900 finished units

What is the fixed overhead volume variance?

Assume the allocation base for fixed overhead costs is the number of units expected to be produced.

A) $2,400 favorable
B) $1,105 favorable
C) $2,400 unfavorable
D) $1,105 unfavorable

B
Explanation: B)
Standard variable overhead rate $24.00
Actual production 3,900
Variable overhead allocated to actual production $93,600
Budgeted fixed overhead $42,000
Flexible budget overhead for actual production $135,600

Budgeted fixed overhead $42,000
Budgeted unit production 3,800
Budgeted fixed overhead per unit $11.05
Standard variable overhead rate $24.00
Overhead to be allocated per unit produced $35.05
Actual production 3,900
Standard overhead allocated to production $136,705