Chapter 8, Problem 8.24E

Fixed manufacturing overhead variance analysis (continuation of 8-23). The Sourdough Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2017, fixed manufacturing overhead was budgeted at $3.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $294,000.

1. A. Prepare a variance analysis of fixed manufacturing overhead cost. Use Figure 8-4 (page 304) as a guide.

  Required

1. B. Is fixed overhead underallocated or overallocated? By what amount?
2. C. Comment on your results. Discuss the variances and explain what may be driving them.