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Question : The French Bread Company also allocates fixed


The French Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2012, fixed manufacturing overhead was budgeted at $4.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $272,000.

Required:
1. Prepare a variance analysis of fixed manufacturing overhead cost. Use Exhibit 8-4(p. 277) as a guide.
2. Is fixed overhead under allocated or over allocated? By what amount?
3. Comment on your results. Discuss the variances and explain what may be driving them.

Exhibit 8-4:




The French Bread Company also allocates fixed manufacturing overhead to products on -1