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 $517,716767,760$

Direct labor $330,960493,560$

Total contribution margin $ $87,074$ $ $19,651$

Fixed costs $33,50936,000$

Operating income $ $53,565$ $ $(16,349)$

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:

Current Year Prior Year

Sales units $39,40045,700$

Price $ $23\mathrm{.}75$ $ $28\mathrm{.}03$

Direct materials cost per unit of material $ $7\mathrm{.}30$ $ $8\mathrm{.}40$

Direct materials required per unit $1\mathrm{.}802\mathrm{.}00$

Direct labor required per unit $0\mathrm{.}600\mathrm{.}75$

Wage rate $($$$/$hour$)$ $ $14\mathrm{.}00$ $ $14\mathrm{.}40$

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

Answer is complete but not entirely correct.

$\backslash$table$[[,,,,,],[1.,$Selling price variance in sales dollars,$$168,632,,$Unfavorable,$],[,$Sales volume variance in contribtion,$$,2,709,$Unfavorable,$],[2$a$.,$Materials usage variance,$$172,032,$Favorable,$,],[,$Materials price variance,$$,78,012,$Favorable,$$