GrandBlue, are you out there? Thanks for your help already...

This is the second of three question asked based on this case study. Please read to the bottom. Another attempt has been made but it does not lead to the correct answer.

Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size.

One such non-custom model is called Luxury Base Frame. Normal production is1,000units. Each unit has a direct labor hour standard of5hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only680units were produced;4,500direct labor hours were allowed for standard production, but only4,000hours were used. Standard and actual overhead costs were as follows.

Standard (1,000units); Actual (680units)

Indirect materials $9,700; $9,900

Indirect labor 34,700; 41,100

(Fixed) Manufacturing supervisors salaries 18,100; 17,700

(Fixed) Manufacturing office employees salaries 10,500; 10,100

(Fixed) Engineering costs 21,800; 20,200

Computer costs 8,100; 8,100

Electricity 2,000; 2,000

(Fixed) Manufacturing building depreciation 6,400; 6,400

(Fixed) Machinery depreciation 2,400; 2,400

(Fixed) Trucks and forklift depreciation 1,200; 1,200

Small tools 600; 1,100

(Fixed) Insurance 400; 400

(Fixed) Property taxes 200; 200

Total $116,100; $120,800

Overhead application rate is $23.22 (this was placed into the module and confirmed correct).

Applied overhead: $104,490 (this was placed into the module and confirmed correct).

How do I calculate the volume variance?

ATTEMPT ALREADY MADE BUT NOT CORRECT:

Explanation from a Course Hero tutor:

Volume variance = (actual units produced - budgeted production units) x budgeted overhead rate per unit

It is a favorable volume variance if actual production is greater than the budgeted production, when the total fixed overhead allocated resulting in lower production cost per unit.

Unfavorable volume variance happened when the amount of fixed overhead cost applied was less than the budgeted fixed overhead cost.

Using this tutor's help, I've tried the following:

Volume Variance = (Actual Units Produced - Budgeted Production Units) x Budgeted Overhead Rate Per Unit

Volume Variance = (680 - 1,000) x $23.22

Volume Variance = -320 x $23.22

Volume Variance = -7. 430.40

This answer was not correct. Was I applying the formula correctly?