The formula to compute the direct labor rate variance is to calculate the difference between Actual costs + (Actual hours x Standard rate) Actual costs - Standard cost (Actual hours x Standard rate) - Standard costs Actual costs - (Actual hours x Standard rate) The formula to the compute direct labor time variance is to calculate the difference between Actual costs - Standard costs Actual costs + Standard costs (Actual hours x Standard rate) - Standard costs Actual costs - (Actual hours x Standard rate) The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: Fixed overhead (based on 10,000 hours) Variable overhead Total variable cost, $18,000 Total fixed cost, $8,000 3 hours per unit @ $0.80 per hour 3 hours per unit @ $2.00 per hour The amount of the fixed factory overhead volume variance is $2,000 favorable $2,000 unfavorable $2,500 unfavorable $0