The Whole 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 Isbor-hours. Following is some budget data for the Whole Bread Company: (Click the icon to view the budget data.) The Whole Bread Company provides the following additional data for the year ended December 31, 2017: Click the icon to view the additional data.) Read the requirements Requirement 1. What is the denominator level used for alccating variable manufacturing owerhead? (That is, for how many direct manufacturing labor hours is Whale Bread budgeting?) The denominator level is hours. Requirement 2. Prepare a variance analysis of variable manufacturing overhead. Begin by calculating the following amounts for the variable twerhead that will be used to caskuliste the variances. Actual Input Actual Coste Flexible Allocated Incurred Budgeted Rate Budget Overhead Variable MOH JI 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).) . , (U 4-Variance Spending Efficiency Production-Volume Analysis Variance Variance Variance Variable MOH Requirement 3. Discuss the variances you have calculated and give possible expilarializris for thrern. . The spending variance is explanation could be ain) because variable manufacturing overhead was than planned. A possible In energy rates relative to the rate per standard labor-hour assumed in the flexble budget. afficient in producing the baguettes than management had anticipated in the budget The efficiency variance is This could occur because of because the actual number of direct manufacturing labor-hours required was than the number of hours in the flexible budget Labor was morale in the company, which could result from an increase in wages or an improvement in the compensation scheme. le because the efficiency variance was 110 The flexible-budget varlance of | compensate for the spending variance. Data table 0.02 hours per baguette Direct manufacturing labor use Variable manufacturing overhead $10.00 per direct manufacturing labor-hour Data Table i table 2,800,000 baguettes Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead 2,300,000 baguettes 41,000 hours $565,800