RJM Enterprises is a manufacturer of consumer electronics products. The industry is very competitive, and RJM has seen its profits fall in recent years, including an operating loss of $18,810 last year. RJM was able to turn that around this year by aggressively cutting costs. The summarized financial results for RJM are shown below: Current Year $ 937,650 Prior Year $ 1,302,419 Gross sales: Less variable costs Direct materials Direct labor Total contribution margin Fixed costs Operating income 560, 196 311,220 $ 66,234 33,509 $ 32,725 787,100 486,129 $ 29,190 48,000 $ (18,810) Jim Green, the management accountant at RJM, is analyzing the company's performance for this year in order to explain to management the specific aspects that drove the company to success. Some of the information Jim obtained follows: Sales units Price Direct materials cost per unit of material Direct materials required per unit Direct labor required per unit Wage rate ($/hour) Current Year 39,900 $ 23.50 $ 7.80 1.80 0.60 $ 13.00 Prior Year 46,300 $ 28.13 $ 8.50 2.00 0.75 $ 14.00 Assume that RJM, for efficiency and to reduce cost, maintains little or no direct materials or work-in-process inventory. Required: 1. Determine the selling price variance for the current year based on sales dollars. Determine the sales volume variance based on contribution margin. 2. Determine the following variable cost variances: a. The usage and price variances for direct materials. b. The efficiency and rate variances for direct labor. 1 Selling price variance in sales dollars Sales volume variance in contribtion 2a. Materials usage variance Materials price variance 2b. Labor usage variance Labor rate variance Unfavorable Unfavorable Favorable Favorable Favorable Favorable