Please describe the circumstances of the following case study and recommend a course of action. Explain your approach to the problem, perform relevant per unit calculations and analysis, and formulate a recommendation. Ensure your work and recommendation are thoroughly supported.

Case Study:

Papaya Partners is a distributor of papayas. They purchase papayas from individual growers and package them in 10-pound cartons for delivery to their various customers, generally supermarkets. Last month, they budgeted to sell $500,000 worth of cartons at a price of $25 each. Actual sales met a budget of $500,000 at $25 per carton.

Management has received cost information based on actual performance and needs to understand the drivers of the overall variance from the budget. They have asked you, as an analyst in their management accounting department, to calculate and explain the variances. The following data has been provided:

BudgetCost of fruit @ 10 pounds per carton$200,000Cost of packaging @ 1 pound per carton$10,000Labor costs @ .5 hourse per carton$90,000Total Cost$300,000ActualCost of fruit @ 10 pounds per carton$244,200Cost of packaging @ .55 pound per carton$11,000Labor costs @ .75 hourse per carton$150,000Total Cost$405,200Unfavorable variance$105,200.00

Specifically, management needs to know the:

• Standard cost per unit (carton)
• Actual cost per unit
• Direct materials price variances
• Direct materials usage variances
• Direct labor rate variance
• Direct labor efficiency variance