The following information for the past year is available from Thinnews Co., a company that uses machine hours to apply standard factory overhead cost to outputs:

Actual total factory overhead cost incurred	$	30,000
Actual fixed overhead cost incurred	$	7,000
Budgeted fixed overhead cost	$	12,000
Actual machine hours		8,000
Standard machine hours allowed for the units manufactured		4,600
Denominator volumemachine hours		5,300
Standard variable overhead rate per machine hour	$	3

Under a two-variance breakdown (decomposition) of the total factory overhead variance, the fixed overhead production volume variance, to the nearest whole dollar, is: (Do not round intermediate calculations.)

Multiple Choice

• $585 favorable.

• $785 unfavorable.

• $1,585 favorable.

• $1,585 unfavorable.

• $2,185 favorable.