Rare earth metals like yttrium, terbium, neodymium and samarium are used in many high-tech industries.
Fibre optics, iPads, solar panels, car engines and wind turbines all use some of the rare metals. These metals are termed rare, as they are not often found in concentrations which are worthy of commercial mining. China controls 97 per cent of the global supply of rare earth metals. The vulnerability of this became apparent in 2010 when China announced it would restrict the exports of rare metals. The exports were due to be cut by 35 per cent in the first half of 2011, causing a problem for US manufacturers, for example.
The export restriction has had quite an effect on prices of these metals. Take yttrium, for example. This metal is used in almost every car to help improve fuel efficiency and reduce pollution. In the year to March 2011, the price of one kilogram of yttrium had increased from around \($50\) to about \($180\). Such a price increase could have quite an effect on the input costs of any company using the metal.
Questions

1 If variances were calculated based on a standard lower price for a material like yttrium, should the standard be adjusted and the variances re-computed given the price increase?
2 Should the standard material cost of materials like yttrium be updated frequently?