For the year 2021, KIKO Ltd budgeted to produce 15,000 units of its product, KITO, and to use 30,000 machine hours. The company allocates both variable and fixed manufacturing overhead costs using machine hours. Variable manufacturing overhead costs were budgeted at $10 per machine hour, and total budgeted fixed manufacturing costs were $600,000.

Actual results for the year 2021 were:

Production of KITO (units)	14,500
Fixed manufacturing overhead	$535,000
Variable manufacturing overhead	$322,000
Manufacturing labour hours	30,100

An interpretation of the production volume variance is that:

	the production of less units than budgeted resulted in more fixed manufacturing overhead costs spending than expected.
	the production of more units than budgeted resulted in more fixed manufacturing overhead costs recovered than expected.
	none of the options.
	the production of less units than budgeted resulted in an over-allocated fixed manufacturing overhead.
	the production of less units than budgeted resulted in less fixed manufacturing overhead costs recovered than expected.