The white bread company provides the following additional data for the year ended December 31,2020

Requirement 1

The denominator level is ___ hours

Requirement 2

	Actual costs incurred	Actual input x budget rate	Flexible budget	Allocated overhead
Variable MOH

4 variance analysis	Spending variance	Efficiency variance	Production volume variance
Variable MOH

Requirement 3

The spending variance is (favorable or unfavorable) because variable manufacturing overhead was ___% (higher or lower) than planned. A possible explanation could be a(n) (increase or decrease) in energy rates relative to the rate per standard labor hour assumed in the flexible budget.

The efficiency variance is (favorable or unfavorable) because the actual number of direct manufacturing labor hours required was (higher or lower) than the number of hours in the flexible budget. Labor was (more or less) efficient in producing the baguettes than management had anticipated in the budget. This could occur because of (improve or a decline in) morale in the company, which could result from an increase in wages or an improvement in the compensation scheme.

The flexible budget variance of $_____ is (unfavorable or favorable) because the efficiency variance was (large or not large enough) to compensate fo the spending variance

The White 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 White Bread Company: Data table Direct manufacturing labor use Variable manufacturing overhead 0.02 hours per baguette $10.00 per direct manufacturing labor-hour Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead 2,800,000 baguettes 3,100,000 baguettes 56,100 hours $774,180 1. What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is White Bread budgeting?) 2. Prepare a variance analysis of variable manufacturing overhead. 3. Discuss the variances you have calculated and give possible explanations for them