Reference no: EM132529617

Shorts, Inc. produces small engines. For last year's operations, the following data were gathered:

Units produced:100,000

Direct labor:160,000 hours @ $12.00

Actual variable overhead:$1,300,000

Question 1: Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively

Option a. $100,000 U and $20,000 F

Option b. $20,000 U and $80,000 F

Option c. $20,000 U and $80,000 U

Option d. $100,000 U and $20,000 U

Option e. None of these choices are correct.