Answer:
$2,880 unfavorable
Explanation:
A difference between the actual and estimated (budgeted) quantity of consumption of a product at standard rate
Formula for volume variance
Volume variance = (Actual quantity - budgeted Quantity) x Standard Rate
Budgeted Fixed overhead rate = $47,040 / $29,400 = $1.60 per direct labor hour
Budgeted Variable overhead rate = 355740/29400 = $12.10 per direct labor hour
Standard direct labor hour = ( 29,400 / 49,000) x 46,000 = 27600 direct labor hour
Fixed OH applied = 27,600 hours x $1.6 per direct labor hour = $44,160
Variable OH applied = 27,600 x $12.10 per direct labor hour = $333.960
Total overhead applied = $44,160 + $333,960 = $378,120
Budgeted Overhead = $47,040 + $333,960 = $381,000
Volume variance = Budgeted overhead - Total overhead applied
= 381,000 - $378,120 = $2,880 unfavorable
As actual production used more labor hours than estimated, so the volume variance is unfavorable.
