Saved 6 2:29:56 Exercise 10-16 Overhead Performance Report with Both Spending and Efficiency Variances [LO4, LO7] 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 bok nt Actual labour-hours ences Standard labour-hours allowed for the actual number of cheques processed Variable overhead costs: office supplies Staff coffee lounge Indirect labour Total variable overhead cost Cost Formula Actual (per Costs labour Incurred in hour) October $ 0.90 $1,125 0.20 2.50 $3.60 320 2,500 $3,945 1,360 1,300 1,380 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 $5,400 in October, while the flexible budget was $5,000 for the month. Required. He