The Boston Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two? direct-cost categories: direct materials and direct manufacturing labor. The Boston Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing? labor-hours. For 2014?, the following is some budget data for the Boston Bread? Company:

Direct manufacturing labor use	0.02	hours per baguette
Fixed manufacturing overhead	?$3.00	per direct manufacturing?labor-hour

The Boston Bread Company provides the following additional data for the year ended December? 31, 2014?:

Planned (budgeted) output	3,700,000	baguettes
Actual production	2,700,000	baguettes
Budgeted direct manufacturing labor	74,000	hours
Actual direct manufacturing labor	48,100	hours
Actual fixed manufacturing overhead	$289,000

Requirments

1.	Prepare a variance analysis of fixed manufacturing overhead cost.
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.

Requirement 1. Prepare a variance analysis of fixed manufacturing overhead cost.

Begin by completing the table below for the fixed manufacturing overhead that will be used to calculate the variances.

		Same Budgeted
		Lump Sum
	Actual Costs	Regardless of	Flexible	Allocated
	Incurred	Output Level	Budget	Overhead
Fixed MOH