7. The variable portion of Whaley Company's flexible budget for manufacturing overhead is as follows: Overhead Costs Cost Formula Machine Hours 10,000 13,000 24,000 Per machine hour Utilities $1.2 $12,000 $21,600 $28,800 Supplies 0.3 3,000 5,400 7,200 Maintenance 2.4 24,000 43,200 57,600 Rework 0.6 6,000 10,800 14,400 Total variable overhead cost $4.5 $45,000 $81,000 $103,000 During a recent period, the company recorded 15,000 machine-hours of activity. The variable overhead costs incurred were as follows: Utilities $20,000 Supplies. $4,700 Maintenance $ 35,100 Rework $12,300 31 Page The budgeted activity for the period had been 18,000 machine-hours. Required: 1. Prepare a variable overhead performance report for the period. Indicate whether variances are faxorable (F) or unfavorable (U). Show only a spending variance on your report. (3 marks) 2.Discuss the significance of the variances. Might some variances be the result of others? Explain. (2 marks)