fixed production overhead volume variance

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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).