The Managerial Accountant at Sailboat World Compiles a Monthly Overhead

question 64

Short Answer

The managerial accountant at Sailboat World compiles a monthly overhead variance report. The company produced 30,584 sailboats in the past month at 0.28 machine hours per unit. The budgeted fixed overhead cost was $95,000 whereas actual fixed overhead cost was $96,400. Calculate the standard fixed overhead cost allocated to production at $11 per machine-hour. Compute the fixed overhead volume variance and the fixed overhead budget variance.

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Definitions:

Job Classification

The system of organizing jobs into categories or grades based on the nature of the job duties, responsibilities, and qualifications required.

Point System Matrix

A structured evaluation tool that uses a numerical score to assess and compare various factors or options.

Weight Subfactors

Elements under a main category that are assigned different levels of importance or influence in an evaluation process.

Variable Pay

Compensation that is based on performance, productivity, or company success, supplementing an employee’s base salary.