Question

required information
use the following information for the quick study below. (algo)
the following information applies to the questions displayed below.
airpro corporation reports the following for this period.
actual total overhead $ 28,825
standard overhead applied $ 33,480
budgeted (flexible) variable overhead rate $ 2.10 per unit
budgeted fixed overhead $ 11,900
predicted activity level 11,900 units
actual activity level 10,800 units
qs 21 - 16 (algo) volume variance lo p4
compute the volume variance and identify it as favorable or unfavorable.

Explanation:

Step1: Calculate fixed overhead rate

Fixed overhead rate = Budgeted fixed overhead / Predicted activity level
$$=\frac{11900}{11900}= 1\ per\ unit$$

Step2: Calculate volume variance

Volume variance = (Predicted activity level - Actual activity level) × Fixed overhead rate
$$=(11900 - 10800)\times1=1100$$
Since actual activity level is less than predicted activity level, the volume variance is unfavorable.

Answer:

Volume variance is $1100$ unfavorable.