Prescott Manufacturing manufactures widgets for distribution. The standard costs for the manufacture of widgets follow:

		Standard Costs		Actual Costs
Direct materials		3 lbs. per widget at $35 per pound		31,000 lbs. at $34 per pound
Direct labor		2.5 hours per widget at $11 per hour		22,500 hours at $11.80 per hour
Factory overhead		Variable cost, $24/widget Fixed cost, $40/widget		$241,500 variable cost $381,250 fixed cost

Budgeted factory overhead was $640,000. Overhead applied is based on widgets produced. The company estimated that 10,000 widgets would be produced; however, only 9,600 were produced. Calculate the following amounts. Identify whether the variance is favorable or unfavorable?

1.		Rate at which total factory overhead is applied		$	per widget
2.		Materials price variance		$	UnfavorableFavorable
3.		Total materials variance		$	UnfavorableFavorable
4.		Overhead volume variance		$	UnfavorableFavorable
5.		Overhead controllable variance		$	UnfavorableFavorable

Click if you would like to Show Work for this question:

Open Show Work