Primara Corporation has a standard costing system in which it applies overhead to products on the basis of the standard direct labour-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year $ 500,000 Actual fixed overhead cost for the year $ 508,000 Budgeted standard direct labour-hours (denominator level of activity) 50,000 Actual direct labour-hours 54,000 Standard direct labour-hours allowed for the actual output 52,000

Required: 1. Compute the fixed portion of the predetermined overhead rate for the year.

2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)