The - produced So even though the fixed costs per unit...

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The $232 volume variance indicates an over-application of fixed costs. This occurred because actual  production is higher than the budget. Remember that as more units are produced, fixed costs per  unit decrease. However, the predetermined overhead rate is established when the budget is  prepared, and the same rate is used throughout the year regardless of the actual number of units 
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Unformatted text preview: produced. So even though the fixed costs per unit decreased when 13,300 units were produced rather than the 12,500 budgeted, the same predetermined overhead rate using the higher cost per unit was used to allocate overhead to production....
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