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Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires three

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires three standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 210,000 units. Total overhead was budgeted at $910,000 for the year, and the fixed manufacturing overhead rate was $1.00 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below:

Actual production 208,000 units
Actual direct labor-hours 450,000 direct labor-hours
Actual variable manufacturing overhead $362,000
Actual fixed manufacturing overhead $576,000

Franklin's fixed manufacturing overhead volume variance for the year is:

$57,500 unfavorable

$19,000 favorable

$6,000 unfavorable

$17,500 favorable

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