The cheque-clearing office of Pay Loans Company is responsible for processing all cheques that come to the company for payment Managers at the company believe that variable overhead costs are essentially proportional to the number of labour- hours worked in the office, so labour-hours are used as the activity base when preparing variable overhead budgets and performance reports. Data for October, the most recent month, appear below: Budgeted labour-hours Actual labour-hours Standard labour-hours allowed for the actual number of cheques processed 1,320 1,280 1,340 Cost Formula (per labour- hour) Actual Costs Incurred in October Variable overhead costs: office supplies Staff coffee Lounge Indirect labour Total variable overhead cost $ 0.50 8.10 2.10 $ 625 188 3,778 $ 2.70 $4,591 Fixed overhead at Pay Loans Company consists entirely of supervisory salaries and is applied at a rate of $5 per direct labour- hour. Actual fixed overhead costs totalled $5,150 in October, while the flexible budget was $5,000 for the month. Answer is not complete. PAY LOANS COMPANY Overhead Performance Report For the Month Ended October 31 Breakdown of the Total Variance Overhead costs Cost Formula (per labour- hour] Actual Costs Incurred for 1,280 Labour Hours Flex Budget Based on 1,280 Labour- Hours Flexible Budget Based on 1,340 Labour- Hours Total Variance Spending (Budget) Variance Efficiency Variance $ $ $ 640 $ 670 F 0.50 0.10 625 188 $ 45 54 $ 30 F 6 XU 128 SO OS $ 15 X F $ 60 F 134 U O 2.10 3,778 2,688 2,814 964U F iable overhead costs: Office supplies Staff coffee lounge ndirect labour Total variable overhead it ed overhead costs: Supervisory salaries al overhead cost 126 U $ U 162 $ 2.70 $ 4,591 $ 3,456 $ 3,618 S 973 U 8 1,090 $ 1.135 F > $ 5,150 5,000 5,000 150 U None 0 XU $ U 264 150 $ 2.420 XX $ 9,741 U F 2,096