Reed Company applies manufacturing overhead costs to products on the basis of direct labour hours. The standard cost card shows that $6$ direct labour hours are required per unit of product. For August, the company budgeted to work $180,000$ direct labour hours and to Incur the following total manufacturing overhead costs.

Total variable overhead costs $$198,000$

Total fixed overhead costs $$237,600$

During August, the company completed $28,000$ units of product, worked $172,000$ direct labour hours, and incurred the following total manufacturing overhead costs:

Total variable overhead costs $$197,800$

Total Fixed overhead costs $$230,600$

The denominator activity in the predetermined overhead rate is $180,000$ direct labour hours. $($Note that this is the same data that was provided for the previous question.$)$ The fixed overhead budget variance for August is:

Multiple Choice

$$7,000$ F

$$7,000$ U

$$6,400$ F

$$6\mathrm{.}400$ U