Karnarine McKnight is the owner of Acton Bikes, a company that probuces tigh qualoy cross-county bicycles. Action Bikes patcopates in a supply chan that consists of suppliers, manulacturets, disstbutors, refuce costs if he purchased stanium from an online markeplace at a bower price. [Click the icon to vew the standiard and actuli information) Read the ceouirements. Requirement 1 . Compute the disect materiats price and efficieacy variances Lefs begn by calculating the cost for the actual inpul at the busbeted price: Data table Action Bikes established the following standards based upon the company's experience with their previous suppliers. The standards are as follows: Actual results for the first month using the online supplier of titanium are as follows: Requirements 1. Compute the direct materials price and efficiency variances. 2. What factors can explain the variances identified in requirement 1 ? Could any other variances be affected? 3. Was switching suppliers a good idea for Action Bikes? Explain why or why not. 4. Should Michael Alderman's performance evaluation be based solely on price variances? Should the production manager's evaluation be based solely on efficiency variances? Why is it important for Katharine McKnight to understand the causes of a variance before she evaluates performance? 5. Other than performance evaluation, what reasons are there for calculating variances? 6. What future problems could result from Action Bikes' decision to buy a lower quality of titanium from the online marketplace