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8-23 Variable manufacturing overhead variance analysis. The French Bread Company bakes baguettes for distribution to upscale...

8-23 Variable manufacturing overhead variance analysis. The French Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the French Bread Company:

Direct manufacturing labor use

0.02 hours per baguette

Variable manufacturing overhead

$10.00 per direct manufacturing labor-hour

The French Bread Company provides the following additional data for the year ended December 31, 2017:

Planned (budgeted) output

3,200,000 baguettes

Actual production

2,800,000 baguettes

Direct manufacturing labor

50,400 hours

Actual variable manufacturing overhead

$680,400

Required:

1. What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is French Bread budgeting?)

2. Prepare a variance analysis of variable manufacturing overhead. Use Exhibit 8-4 (page 324) for reference.

3. Discuss the variances you have calculated and give possible explanations for them.

plz use computer writing, not hard writing

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