7 A company that absorbs variable overheads on the basis of machine hours provides the following information relating to its variable overheads:

Budgeted standard total variable overhead £74,000 Actual variable overhead £85,000 Budgeted standard machine hours 5,000 Actual standard machine hours 5,500 From the above information, what are the variable overhead expenditure and efficiency variances?

(a) Expenditure variance £3,600 favourable, efficiency variance £7,400 adverse

(b) Expenditure variance £3,600 adverse, efficiency variance £7,400 favourable

(c) Expenditure variance £3,600 adverse, efficiency variance £7,400 adverse

(d) Expenditure variance £3,600 favourable, efficiency variance £7,400 favourable