The Malt Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. The Malt Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2020, fixed manufacturing overhead was budgeted at $4.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $288,000.

Data Table

Direct manufacturing labor use	0.02 hours per baguette
Variable manufacturing overhead	$10.00 per direct manufacturing labor-hour

Data Table

Planned (budgeted) output	3,200,000 baguettes
Actual production	2,700,000 baguettes
Direct manufacturing labor	48,200 hours
Actual variable manufacturing overhead	$655,520

The following is some budget data for the Malt Bread Company for 2020 and additional information for the year ended Decmeber 31, 2020:

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.

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

Now complete the 4-variance analysis using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).)

4-Variance Analysis	Spending Variance		Efficiency Variance		Production-Volume Variance
Fixed MOH		U		N		U

Requirement 2. Is fixed overhead underallocated or overallocated? By what amount?

Fixed manufacturing overhead is

underallocated

by

$

.