[panchaga]

Xyz Company uses standard costing. Overhead is applied at $12 per machine hour. Data for the month of March follows:

Actual overhead costs $194,000
Standard machine hours allowed for actual production 16,500
Actual machine hours used 17,400
Flexible budget overhead for standard hours allowed 208,800
The overhead volume variance is:

[rehmanvohra]

Here is the formula for volume variance:

(Standard hours allowed - actual hours worked) x standard overhead rate.

Plug in the figures and you have your answer.

[panchaga]

Thank you very much