The Sourdough 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 Sourdough Bread Company:

Direct manufacturing labor use 0.02 hours per baguette

Variable manufacturing overhead $10.00 per direct manufacturing labor-hour

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

Planned (budgeted) output 3,100,000 baguettes

Actual production 2,600,000 baguettes

Direct manufacturing labor 46,800

Actual variable manufacturing overhead 617,760

Prepare a variance analysis of variable manufacturing overhead. Use Exhibit 8-4 (page 304) for reference &Discuss the variances you have calculated and give possible explanations for them.

Answer rating: 100% (QA)

Variable overhead spending variance should be calculated in the following manner Actual variable manufacturing overhead rate 1320 per hour Standard va... View the full answer