The best cost driver that Carlson has for variable factory overhead in the assembly department is machine hours. During July, the company budgeted 360 machine hours and $3,240 for its Kentucky plant’s assembly department. The actual variable overhead incurred was $3,435, which was related to 375 machine hours. The variable overhead spending variance and variable overhead efficiency variance are:
a) Spending variance = $195 favorable; Efficiency variance = $195 favorable
b) Spending variance = $195 favorable; Efficiency variance = $195 unfavorable
c) Spending variance = $195 unfavorable; Efficiency variance = $195 favorable
d) Spending variance = $195 unfavorable; Efficiency variance = $195 unfavorable