Carlson Fashions uses standard costs for Its manufacturing division. From the following data, calculate the fixed overhead volume variance.

-Actual fixed overhead $40,000
-Budgeted fixed overhead $21,000
-Standard overhead allocation rate $6
-Standard direct labor hours per unit 4 DLHr
-Actual output 2,10

$29,400 favorable

Explanation:

The formula to compute the fixed overhead volume variance is shown below:

= Budgeted fixed overhead - standard fixed overhead cost allocated to production

where,

Standard fixed overhead cost allocated to production  is

= 2,100 × $6 × 4

= 50,400

So, the fixed overhead volume variance is

= $21,000 - $50,400

= $29,400 favorable

We assume the actual output is 2,100 instead of 2,10

so they can see what that city is producing and to also see if they can some how get that product. like gold in africa.