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 $18,585 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: $ 934,920 $ 1,273,545 Less variable costs Direct materials 550,368 746,200 Direct labor 329,280 511,875 Total contribution margin $ 55,272 $ 15,470 Fixed costs 33,509 34,055 Operating income $ 21,763 $ (18,585 ) 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 39,200 45,500 Price $ 23.85 $ 27.99 Direct materials cost per unit of material $ 7.80 $ 8.20 Direct materials required per unit 1.80 2.00 Direct labor required per unit 0.60 0.75 Wage rate ($/hour) $ 14.00 $ 15.00 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.