SaveBandit; hope this helps..
volume variance focuses on fixed overhead variance. The way I remember is volume is “used”, so it is the difference between fixed overhead applied and budgeted fixed overhead. So if the applied overhead is less than budgeted then it is unfavorable because the actual production is less than planned (actual used * POR= fixed overhead applied).
capacity variance is the difference between actual fixed overhead and budgeted fixed overhead. It presents “spent” overhead. So if actual overhead is greater than budgeted then it is unfavorable because spent too much than planned.
total variance is the difference between actual and standard overhead.
Did you get that question from Becker? The explanation seems confusing. Ninja explains better that budgeted fixed overhead is given ($20,000). You just have to find applied fixed overhead which is actual 19000 frames*$1/unit. The difference is $1000 unfavorable since produced less than budgeted.
REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27
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