1) Variance analysis of fixed manufacturing overhead cost:

Actual Manufacturing Fixed Overhead = $289,000

Budgeted Direct Manufacturing Labor Hours = 3,000,000 * 0.02 = 60,000 hours
Flexible budget Fixed manufacturing overhead costs = Budgeted Direct Manufacturing Labor Hours * Standard Cost per Direct Labor Hours =60,000 hours * $ 4 = $ 224,000

Fixed manufacturing overhead costs applied:-
Standard hours = Actual production * Standard Direct Manufacturing labor hours per baguette = 2,700,000 * 0.02 hours = 54,000 hours
Fixed manufacturing overhead costs applied = 54,000 * $ 4 = $216,000

$65,000 Unfavorable fixed manufacturing overhead spending variance = $ 289,000 - $ 224,000. Variance is unfavorable because the actual fixed manufacturing overhead costs are higher than budgeted costs.

$8,000 unfavorable fixed manufacturing overhead volume variance = $ 224,000 - $ 216,000. Variance is unfavorable because the volume of goods produced and sold was lower than expected.

2. Fixed manufacturing overhead is under-allocated by (65,000+8,000) = $73,000. Because actual fixed manufacturing overhead i.e. $ 289,000 is higher than fixed manufacturing overhead costs applied i.e $ 216,000.

3. Unfavorable fixed manufacturing overhead spending variance is $65,000 due to actual fixed manufacturing overhead cost is higher than budgeted costs. Unfavorable fixed manufacturing overhead volume variance is $8,000 due to the volume of goods produced and sold is lower than budgeted.