Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Required:

1.         Compute the fixed portion of the predetermined overhead rate for the year.

2.         Compute the fixed overhead budget variance and volume variance.

Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year $250,000 $254,000 Budgeted standard direct labor-hours (denominator level of activity) 25,000 Actual direct labor-hours Standard direct labor-hours allowed for the actual output 27,000 26,000