XYZ Inc. sells a single product for a budgeted selling price of $25 per unit. Budgeted direct materials costs were $5 per unit, while budgeted direct labour and variable overhead costs were $3 and $2 respectively. Budgeted fixed overhead costs amount $25,000 per month. The company has a practical production capacity of 10,000 units per month. Budgeted variable selling costs are $2 per unit. Budgeted fixed selling costs are $2,000 per month. During the company's first month of operations, the company produced 10,000 units and sold 9,500 units at an average selling price of $18 per unit. Fixed and variable costs were as budgeted. The company's sales volume variance was:

Multiple Choice

• $10,000 favourable

• $10,000 unfavourable

• $20,000 favourable

• $12,500 unfavourable