Petra Company uses standard costs for cost control and internal reporting. Fixed costs are budgeted at $36,000 per month at a normal operating level of 10,000 units of production output. During October, actual fixed costs were $40,000, and actual production output was 12,000 units. Required a Determine the fixed overhead budget variance. b Assume that the company applied fixed overhead to production on a per-unit basis. Determine the fixed overhead volume variance. Was the fixed overhead budget variance from requirement (a) affected because the company operated above the normal activity level of 10,000 units? Explain. Explain the possible causes for the volume variance computed in requirement (b). How is reporting of the volume variance useful to management?

DONT ANSWER IF YOU DON'T EXPLAIN TO ME WHY IS THE FIXED OVH VOLUME VARIANCE FAVORABLE!!!!!! IF THE STANDARD IS 43,200 AND THE FLEXIBLE BUDGET IS 36,000. WHY ISN'T IT 7200 UNFAVORABLE BECAUSE THERE ARE MORE UNITS THAT WILL INCREASE YOUR FC THAN YOUR BUDGET???????