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 1,310

Actual labour hours 1,290

Standard labour hours allowed for the actual number of cheques processed 1,330

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Variable overhead costs: Cost formula (per labour hour) Actual costs incurred in October

Office supplies $0.40 $480

Staff coffee lounge 0.10 189

Indirect labour 2.00 3,780

Total variable overhead cost $2.50 $4,449

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Fixed overhead at Pay Loans Company consists entirely of supervisory salaries and is applied at a rate of $4 per direct labour-hour. Actual fixed overhead costs totalled $4,200 in October, while the flexible budget was $4,000 for the month.

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.

		Pay Loans Company Overhead Performance Report For the month ended October 31
						Breakdown of total variance
Overhead Costs	Cost Formula (per labour hr)	Actual (1,290 hrs)	Flexible Budget (1,290 hrs)	Static Budget (1,330 hrs)	Total Variance	Spending (budget) Variance	Efficiency Variance
Variable overhead costs:
Office supplies	$0.40	$480.00
Staff coffee lounge	0.10	189.00
Indirect labour	2.00	3,780
Total variable overhead cost	$2.50	$4,449
Fixed overhead costs:
Supervisor salaries
Total overhead cost