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 $16,349 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	Prior Year
Gross sales:	$ 935,750	$ 1,280,971
Less variable costs
Direct materials	517,716	767,760
Direct labor	330,960	493,560
Total contribution margin	$ 87,074	$ 19,651
Fixed costs	33,509	36,000
Operating income	$ 53,565	$ (16,349)

Jim Green, the management accountant at RJM, is analyzing the companys 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:

	Current Year	Prior Year
Sales units	39,400	45,700
Price	$ 23.75	$ 28.03
Direct materials cost per unit of material	$ 7.30	$ 8.40
Direct materials required per unit	1.80	2.00
Direct labor required per unit	0.60	0.75
Wage rate ($/hour)	$ 14.00	$ 14.40

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.

Assessment Tool iFrame \begin{tabular}{|c|l|c|c|} \hline 1. & Selling price variance in sales dollars & & \\ \hline & Sales volume variance in contribtion & & \\ \hline 2a. & Materials usage variance & & \\ \hline & Materials price variance & & \\ \hline 2b. & Labor usage variance & & \\ \hline & Labor rate variance & & \\ \hline \end{tabular}