Answer
Production-Volume Variance: \$4,320 U (Unfavorable)
Work Step by Step
Production-Volume Variance:
The production-volume variance is calculated using the difference between the actual level of production (720 pieces) and the budgeted level of production (1,200 pieces).
Production-Volume Variance = (Budgeted Fixed Overhead / Budgeted Production) * (Actual Production - Budgeted Production)
Production-Volume Variance = (\$10,800 / 1,200) * (720 - 1,200)
Production-Volume Variance = (\$9) * (-480) = \$4,320 U (Unfavorable)