3. Yes, in some situations, per unit variance is much more useful than the series of functional variances. Company can define the reasons of the variances much more clearly by calculating the per unit variance. And company can fix the problem by directly control the agency in charge. To analysis the variance, firstly we need to calculate the variable cost per unit of product. Using Exhibit 3(Total variable manufacturing costs) we can easily get the cost per unit of the products (Exhibit 4). From the exhibit, we can find out that all the actual cost per unit is higher than the standard ones which mean all the variances are unfavorable. Then we can calculate the exact number of price variance and usage variance for materials and labor.

The data and calculation is showed below: 1) Material variances: a) Price variance= [31.50-30] *113400+ [20.50-20.00] *1375+ [122-120] *(10800+205) + [367-350] *(10800+123) =378488.5 (Unfavorable) Normally the purchasing agent is responsible for price variance. It is 378488.5 unfavorable which mean there are possibilities that the suppliers might raise prices or there is a more expansive delivery system instead of the old ones. Managements now should find out what exactly result in this unfavorable variance to keep the efficiencies in the entire production process. b) Usage variance= [113400-110000] *30+ [1375-1250] *20+ [11005-10000] *120+ [10923-10000] *350=548150 (Unfavorable) The usage variance is largely controlled by the production department, for the reason that the usage variance is 548150 unfavorable, which mean there may be materials waste caused by workers or poor planning or negligent processing. The company should now focus on the production department to ignore these kinds of waste to reduce the usage variance. 2) Labor variances: a) Price variance= [15.25-15] *100200+ [13.50-13] *5500+