### Variable Manufacturing Overhead Variance Analysis**Introduction:**The Sourdough Bread Company specializes in baking baguettes for distribution to upscale grocery stores. The company's cost structure includes two primary direct-cost categories:1. **Direct Materials**2. **Direct Manufacturing Labor**Variable manufacturing overhead is allocated to products based on standard direct manufacturing labor hours.**Budget Data:**Below is some budget data for the Sourdough Bread Company:- **Direct Manufacturing Labor Use:** 0.02 hours per baguette- **Variable Manufacturing Overhead:** $10.00 per direct manufacturing labor-hour**Additional Data:**The Sourdough Bread Company provides the following additional data for the year ended December 31, 2021.---This concludes the provided budget data for an analysis of variable manufacturing overhead variance for the Sourdough Bread Company. Further sections would likely include analysis of these data points and their implications for the company's operations and financial performance. **Planned (budgeted) output:** 3,800,000 baguettes **Actual production:** 2,700,000 baguettes **Direct manufacturing labor:** 48,600 hours **Actual variable manufacturing overhead:** $631,800 **Requirements:**1. **What is the denominator level used for allocating variable manufacturing overhead?** *(That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?)*2. **Prepare a variance analysis of variable manufacturing overhead.**3. **Discuss the variances you have calculated and give possible explanations for them.**

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Description: ### Variable Manufacturing Overhead Variance Analysis**Introduction:**The Sourdough Bread Company specializes in baking baguettes for distribution to upscale grocery stores. The company's cost structure includes two primary direct-cost categories:1.

Variance analysis of variable manufacturing overhead consists of variable overhead spending variance…

Business

Accounting

Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead $631,800 3,800,000 baguettes 2,700,000 baguettes 48,600 hours Requirements: 1). What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?) 2). Prepare a variance analysis of variable manufacturing overhead. 3). Discuss the variances you have calculated and give possible explanations for them.

Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead $631,800 3,800,000 baguettes 2,700,000 baguettes 48,600 hours Requirements: 1). What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?) 2). Prepare a variance analysis of variable manufacturing overhead. 3). Discuss the variances you have calculated and give possible explanations for them.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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