Highland Company uses a standard costing system and applies its fixed manufacturing overhead (FMOH) costs to products using a fixed pre-determined overhead rate (FPOHR) based on direct labor hours (DLHs) and a standard of 2 DLHs per unit. The following relates to production for the period:

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20 Highland Company uses a standard costing system and applies its fixed manufacturing overhead (FMOH) costs to products using a fixed pre-determined overhead rate (FPOHR) based on direct labor hours (DLHs) and a standard of 2 DLHs per unit. The following relates to production for the period Budgeted (Denominator) Activity Actual DLHs Actual production Actual FMOH Over-applied FMOH 240,000 DLHs 225,000 DLHs 117,500 units S 881,250 58,750 The FMOH Volume Variance for the period was closest to: B. $ C. S D. $ E. None of the above 17,500 Favorable 17,500 Unfavorable 20,000 Favorable 20,000 Unfavorable