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 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 hours Actual variable manufacturing overhead $617,760 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. 8-24 Fixed manufacturing overhead variance analysis 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 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?