Chan uses a standard costing in its manufacturing plant for car parts. The standard cost of a particular car part, based on a denominator level of 4000 output units per year, included 6 machine hours of variable manufacturing overhead at $8 per hour and 6 machine hours of fixed manufacturing overhead at $15 per hour. Actual output produced was 4400 units. Variable manufacturing overhead incurred was $245,000. Fixed manufacturing overhead incurred was $373,000.Actual machine hours were 28,400.

1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances, using a 4 variance analysis (4marks)

2. Describe how individual fixed manufacturing overhead items are controlled from day to day.(2marks)

3. Discuss possible causes of the fixed manufacturing overhead variance.(4 marks)