Question: A company uses a standard costing system. At the end of the current year, the company provides the following overhead information. Actual overhead incurred Variable.....................

A company uses a standard costing system. At the end of the current year, the company provides the following overhead information.
Actual overhead incurred
Variable..................... $86,000
Fixed....................... $64,500
Budgeted fixed overhead................ $65,000
Fixed overhead rate (per direct labor hour)....... $ 5
Standard hours allowed for actual production....... 12,000
Actual labor hours used.............. 11,000
What amount is the volume variance?
a. $2,500 favorable
b. $2,500 unfavorable
c. $5,000 unfavorable
d. $5,000 favorable

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