A company produces hose for specialised industrial uses. The company has budgeted an output level of 14,000 units of Model LE-E1 hoses for January 202X. Budgeted overheads amount to £588,000 for fixed manufacturing overhead.

The company’s policy is to allocate overheads based on direct labour hour basis. The standard specification of the product shows that each unit would require 60 labour hours at fixed overhead cost of £0.70 per hour. 

At the end of January, the actual output was recorded at 15,000 units. Actual labour hours worked totalled 880,000. The costing system shows that fixed manufacturing overheads incurred were £608,000.

Required:

Analyse the following variance:

(a) Fixed overhead volume variance

(b) Fixed overhead volume efficiency variance

(c) Fixed overhead volume capacity variance