Modine Corporation has provided the following data for September.
Required:
a. Compute the budget variance for September.
b. Compute the volume variance for September.

a. Budget variance = Actual fixed manufacturing overhead cost − Budgeted fixed manufacturing overhead cost = $41,740 − $42,400 = $660 Favorable
b. Volume variance = Fixed portion of the predetermined overhead rate × (Denominator hours − Standard hours allowed)
= $26.50 per machine-hour × (1,600 machine-hours − 2,000 machine-hours)
= $26.50 per machine-hour × (−400 machine-hours)
= $10,600 Favorable