You need to setup an attribute firts.. (which appears to have been done)
Then you need to setup the variations (Make sure you are entering the correct info all the revelant fields for the attribute..
Thne save and try again..
If you have any cacheing plugins enabled.. disable for temp.. and test...
If still not working., can you provide the following info..
Another thing you can to to eliminate and isolate issue is to enable the default WP 2012 theme and then test.. If it works then the problem is theme...
More than likely its a theme issue with possibly a jquery version conflict... try chsanging to basic theme.. to confirm the same