In October, Pine Company reports 20,000 actual direct labor hours, and it incurs $255,000 of manufacturing overhead costs. Standard hours allowed for the work done is 25,500 hours. The predetermined overhead rate is $10.25 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $8.55 variable per direct labor hour and $53,500 fixed.

Compute the overhead volume variance. Normal capacity was 25,000 direct labor hours.

Overhead Volume Variance $