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Bucinett Applioatione Cace Statle veraus faxble bat varlanees David Catrow is the manufacturing productsion supervisor for Faraday Motor Works (FMw. company tat manutactunes clactrical matons for industrial applications. Trying to sxplain why ha did not gut the year-and bonus that ha had axpected, a told his wito, This is the dumbest place Tve ever workad. Last yoar tha company set up this budgst asauming t would soll 150,000 units Wall, it sold anly 140,000. The company lost manay and gavie me a bonus for not using as much matorials and labor as was callod for in the budget. This year the company has the sama 50,000 units goal and tsals 160,000. Tha company's making allkinds o money. You a think Id gat this big fat bonus. Inatoad, managament tselis me I used mons mateias and labor than was budgoted. They sald he company would have mada a lot mora monay it rd stayod within my budgot. I guess I gotta wait for another bad year batone 1gat a bonua.Like I sald. this is the umbest place Iwe evar worknd. FMW's mastar budget and tha achual resuits tor the most econt yoar at operating activity tollow 150000 1 00010 000 3000000 5.50000 13 50000 F 00000 30000.000 200000 .0000 30000 05109,000 1843000 11400 AT4 000 F Required a. Did FMW Increaso unit salea by cutting pricos or by using soma other strabogy? b. Is Mc. Catrow comact in his conclusion that something is wrong with the companys perfomanco oluation procass? H sa, what do you suggost ba done to improva the aystam? o. Prepano a faxblo budgat and recompute the budgst varliances d. Explain what might have caused the xed costs to ba ditarent from the amount budgoood . Asaume that the company's materals price variance was favorabia and its matoras usago arance wan untavorabla. Explain why Mc Catrow may not be esponsibla for these vanlance Now, oxplain why he may have bean responsbla for the matorals sage varlance t. Assuma the labor prnice varance is untavorabie.Was the labor usaga vanance tavorabie or untavorabla? o is the fed cost volume vaance favorable o unfavorable? Explain the afect af this variance on the cost of ach unit producod