Hexene, inc. produces a specialized machine part used in forklifts. for last year's operations, the following data were gathered: units produced 40,000 direct labor 32,000 hours @ $10.00 actual variable overhead $140,000 hexene employs a standard costing system. during the year, a variable overhead rate of $6.00 was used. the labor standard requires 0.75 hours per unit produced. the variable overhead spending and efficiency variances

a.$45,000 u and $6,500 u.
b.$52,000 f and $12,000 u.
c.$9,600 u and $45,000 f.
d.$16,000 f and $8,400 f.
e. none of these choices are correct.

b.$52,000 F and $12,000 U.

Explanation:

The computation is shown below:

Variable overhead spending variance

= (Standard variable overhead Rate ×  Actual Hour) - (Actual Rate × Actual Hour)

= ($6 × 32,000 hours) - ($140,000)

= $192,000 - $140,000

= $52,000 favorable

The (Actual Rate × Actual Hour) is also known as Actual variable overhead

Variable overhead efficiency variance

= (Standard Rate × Standard Hour) - (Standard Rate × Actual Hour)

= ($6 × 0.75 × 40,000 hours) - ($6 × 32,000 hours)

= $180,000 - $192,000

= $12,000 unfavorable

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