Business, 23.04.2021 17:50 ashiteru123

The SourdoughSourdough 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 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

a. What is the denominator level used for allocating variable manufacturing` overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?)
b. Prepare a variance analysis of variable manufacturing overhead.
c. Discuss the variances you have calculated and give possible explanations for them.

Answers: 3

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The SourdoughSourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The...

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