8-23 Variable manufacturing overhead variance analysis. 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 basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company: The Sourdough Bread Company provides the following additional data for the year ended December 31, 2017: 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. Use Exhibit 8-4 (page 304) for reference. 3. Discuss the variances you have calculated and give possible explanations for them. 8-24. 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. Prepare a variance analysis of fixed manufacturing overhead cost. Use Exhibit 8-4 (page 304) as a guide. 2 Is fixed overhead underallocated or overallocated? By what amount? 3. Comment on your results. Discuss the variances and explain what may be driving them