Terry Co. manufactures a commercial solvent that is used for industrial maintenance. This solvent is sold by the drum and generally has a stable selling price. Due to a decrease in demand for this product, Terry produced and sold 60,000 drums in December. The following information is available regarding Terry's operations for December: Standard costs per drum of product manufactured were as follows: Materials 10 gallons of raw materials $20 1 empty drum $1 Total Materials Costs $21 Direct labor (1 hour) $7 Fixed factory overhead (per direct labor hour) $4 Variable factory overhead (per direct labor hour) $6 Costs incurred during December were as follows: Raw materials: 600,000 gallons were purchased at a cost of $1,150,000 700,000 gallons were used Empty drums: 85,000 drums were purchased at a cost of $85,000 60,000 drums were used Direct Labor: 65,000 hours were worked at a cost of $470,000 Factory overhead: Depreciation of building and machinery: $230,000 Supervision and indirect labor: $360,000 Other factory overhead; $76,500 Total factory overhead: $666,500 The fixed overhead budget for the December level of production was $275,000 Normal capacity is $68,750 direct labor hours Prepare a schedule computing the following variances for December: (1) Materials price variance (computed at the time of purchase) (2) Materials usage variance (quantity) (3) Labor rate variance (4) Labor usuage (efficiency) variance (5) Factory overhead,using the three-way method Indicate whether each variance is favorable or unfavorable