4. Josephine is the manager of Josephines High Fashion Clothing that manufactures and sells to high end retail stores across Canada. After reviewing a monthly variance summary she notices:
   1. A highly favourable material price variance
   2. A highly unfavourable material quantity variance
   3. A high and unfavourable labor efficiency variance.
   4. All other variances are negligible

Josephines instinct is to give a reward to the purchasing manager with a substantial bonus and withhold the plant managers monthly bonus until material quantity and labour efficiency variances improve.

Required;

A .Should Josephine trust her initial gut feeling? (1Marks)

B. What scenario(s) other than good performance in purchasing and poor performance in manufacturing could lead to the same variances as those noted? (2 Marks)

C. What should Josephine do to determine whether the purchasing managers performance is especially good and the plant managers performance is poor? (1 Marks)