Variance – one more

a new machine is purchased which is more expensive but requires less labor to operate per unit.

the impact on the fixed overhead variances will be:

correct answer:

expenditure var: adverse
volume var: fav

my answer:

exp var: adverse
volume var: adv – because the actual hours would decrease thus:

foh vol variance=actual hours x FOAR – budgeted exp

AND IF YOU WORK FEWER HOURS than budgeted hours, THATS AN ADVERSE VAR – by definition.

please explain

thank u!