Eko Plastics Limited budgeted fixed production overheads of ₦6,000,000 for April 2024, based on budgeted output of 2,000 units. Actual output was 1,800 units and actual fixed overheads incurred were ₦5,700,000. What is the Fixed Overhead Volume Variance?

Standard fixed overhead absorption rate = ₦6,000,000 ÷ 2,000 = ₦3,000 per unit. Fixed Overhead Volume Variance = (Actual Output – Budgeted Output) × Standard Rate = (1,800 – 2,000) × ₦3,000 = –200 × ₦3,000 = ₦600,000 Adverse. This variance arises because actual output was below budgeted output, meaning fixed overheads were under-absorbed by ₦600,000.