Scranton Company manufactures a commercial solvent used for industrial maintenance. This solvent, which is sold by the drum, generally has a stable selling price. The company produced and sold 60,000 drums in December.
The following information is available regarding operations for the month:
(a) Standard costs per drum of product manufactured were as follows:

(b) Costs incurred during December were:

Required:
Compute two variances for each material and for labor and four variances for factory overhead. The materials price variance is determined at the time of purchase. Indicate whether the variances are favorable or unfavorable.

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Materials: 10 gallons of raw material.... 1 empty drum $20 $21 ..S7 $ 4 6 $10 Direct labor: 1 hour.... Fixed factory overhead per direct labor hour (normal capacity is 68,750 direct labor hours) Variable factory overhead per direct labor hour Total factory overhead per direct labor hour.. Raw materials: 600,000 gallons purchased at a cost of $1,150,000 700,000 gallons used Empty drums: 85,000 drums purchased at a cost of $85,000 60,000 drums used Direct labor 65,000 hours worked at a cost of $470,000 Factory overhead: Depreciation of building and machinery (fixed). Supervision and indirect labor (semivariable). Other factory overhead (variabl. $230,000 360,000 76,500 $666,500 Total factory overhead