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 Total fixed overhead costs $198,000 $237,600 During August, the company completed 28.000 units of product, worked 172,000 direct lobour hours, and incurred the following total manufacturing overhead costs Total variable overhead costs Total fixed overhead costs $197, Bee $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 Augustis Multiple Choice $7,000 F $7,000 U $6,400 F $6,400 u
