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 1,380 1,310 1,400 Cost Formula (per Actual Costs Incurred in October labour- hour) Variable overhead costs: Office supplies Staff coffee lounge Indirect labour Total variable overhead cost 5 1.10 0.30 2.70 $ 4.10 $1,391 463 2,989 $4,834 Fixed overhead at Pay Loans Company consists entirely of supervisory salaries and is applied at a rate of $6 per direct labour-hour. Actual fixed overhead costs totalled $6,200 in October, while the flexible budget was $6,000 for the month. Required Required Prepare an overhead performance report for October for the cheque-clearing office that includes both spending and efficiency variances for variable overhead and the budget variance for fixed overhead. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect ( zero variance).) PAY LOANS COMPANY Overhead Performance Report For the Month Ended October 31 treakdown of the Total Variance Overhead costs Cost Actual Costa Flexible Peuble Formula Incurred for Budget Based Budget Based (por labour 1310 Labour: on 1310 on 1400 houn Hours Labout Hour Labour Hours Total Variance Spending (Budget Variance Miciency Variance $ Variable overhead costs Office supplies Staff coffee lounge Indirect labour Total vanable overhead cost Fixed overhead costs Supervisory salaries Total overhead cost 1.10 5 0.30 2.70 4.10 $ 1,391 463 2,980 4.834 5 6.200 11.034 5