Ross Product, Inc., manufactures a single product with the following information for the years 2009 and 2010.

Required

1. Determine the selling price variance for 2010 based on sales dollars. Determine the volume variance based on both (a) sales and (b) contribution margin.

2. Determine the variable cost variances (review of Chapter 14, where year 2009 is used for the budget):

a. The usage and price variances for materials (assume there is no change in inventory).

b. The usage and rate variances for labor.

3. Analyze your findings in parts 1 and 2 above.

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2010 2009 25,000 22,000 Sales units $41.00 S40.00 Price Materials cost per unit of materials $18.00 $16.00 Materials usage (materials required per/unit of output) 0.75 1.00 Labor usage (labor-hours required/unit) 2.25 2.00 $ 9.00 $10.00 Wage rate (S/hour)