Kahn Company's static budget was based on sales volume of 12,000 units. Its flexible budget was based on sales volume of 14,000 units. Based on this information Multiple Choice the sales volume variance is expected to be unfavorable. the materials cost volume variance is expected to be favorable. the labor cost volume variance is expected to be unfavorable. None of the answers is correct.

Oerstman, inc. uses a standard costing system and develops its overhead rates from the current annual budget.the budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours.(practical capacity is 500,000 hours)annual budgeted overhead costs total $772,800, of which $556,800 is fixed overhead.a total of 119,300 units, using 478,000 direct labor hours, were produced during the year.actual variable overhead costs for the year were $260,400 and actual fixed overhead costs were $555,450.required: 1. compute the fixed overhead spending variance and indicate if favorable or unfavorable.2. compute the fixed overhead volume variance and indicate if favorable or unfavorable.