Company X produces a line of soy-based products, including a premium soy milk that comes in different flavors. This company has been doing business in the United States for the past 15 years. In face of competition associated with recent entrants into this line of business, the controller of the company implemented a standard cost system to better control costs of the soy milk product line. Financial reports for tracking performance are issued monthly, and any unfavorable cost variances are investigated by management. Recently, the production manager of the soy milk line complained to the company founder that the standards were unrealistic; they they have a negative impact on motivation (because the system focuses only on unfavorable variances); and that because of global forces of supply and demand, they quickly become out of The production manager noted that his recent switch to a newly available homogenizing agent resulted in higher acquisition costs for direct materials but decreased labor hours to produce soy milk. These two changes, when combined, had a negligible effect on manufacturing cost per unit. However, the monthly performance reports continued to show a favorable labor variance (despite evidence that the workers were slowing down or slacking off a bit) and an unfavorable materials variance. Questions: Describe several ways that a standard cost system could improve (ie strengthen) an overall management control system. 2. Give at least two reasons a standard cost system could have a negative impact on employee motivation. 3. Explain strategic issues regarding the decision to adopt a standard costing system, particularly in light of competitive forces confronting this company. (Hint: think in terms of the costs and benefits associated with the use of standard costs as part of a competitive management accounting and control system)