Question: The Whole Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor- hours. For 2012, fixed manufacturing overhead

The Whole Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor- hours. For 2012, fixed manufacturing overhead was budgeted at $ 3.00 per direct manufacturing labor- hour. Actual fixed manufacturing overhead incurred during the year was $ 284,000.

Required

1. Prepare a variance analysis of fixed manufacturing overhead cost. Use Exhibit 13- 6 (page 559) 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.

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