The following data for May has been provided by Mccawley Corporation:

1. Denominator level of activity 4,000 machine-hours
2. Budgeted fixed manufacturing overhead costs $ 78,400
3. Actual level of activity 4,100 machine-hours
4. Standard machine-hours allowed for the actual output 4,200 machine-hours
5. Actual fixed manufacturing overhead costs $ 82,000

Required:
The volume variance for May is . (Round your intermediate calculations to 2 decimal places.)

$3,920 favorable

Explanation:

For computing volume variance first we have to find out the overhead rate which is shown below:

Overhead rate is

= $78,400 ÷ 4,000 machine hours

= $19.6 per machine hour

And, the

Volume variance is

= (Normal capacity - standard hour allowed) × overhead rate

= (4,000 machine hours - 4,200 machine hours) × $19.6

= $3,920 favorable

We simply applied the above formula so that the volume variance could come

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