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. The Sourdough Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturinglabor-hours.

The following is some budget data for the Sourdough Bread Company for 2017 and additional infomation for the year ended Decmeber 31, 2017:

Direct manufacturing labor use

0.02

hours per baguette

Fixed manufacturing overhead

$3.00

per direct manufacturing

labor-hour

Direct manufacturing labor use

0.02

hours per baguette

Fixed manufacturing overhead

$3.00

per direct manufacturing

labor-hour

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.