The difference between the budgeted fixed production overhead volume
and the budgeted amount
. Both the budgeted and actual overhead
are multiplied by the overhead rate
. For example, a company
budgeted production overhead volume of 1,000 units and multiplies that by the overhead rate of $20/unit to get a $20,000 budget
. If the actual volume of units is 1,200 there will be a favorable
fixed production overhead volume variance of $4,000 (1,200 units x $20/unit - $20,000).