Katharine Austen is the owner of Groovy Bikes, a company that produces high qualify cross-country bicycles. Groovy Bikes participates in a supply chain that consists of suppliers, manufacturers. distributors, and elite bicycle stops. For several years Groory Bikes has purchased titanium from suppliers in the supply chain. Groovy Bikes uses titarium for the bicycle frames because it is strenger and lighter than other metals and therefore increases the qualty of the bicycle. Eacler this year, Groovy Bikes hired Michael Gammaro, a recent graduate from State University, as purchasing manager. Michael believed that he could reduce costs if he purchased thanium from an onine marketplace at a lower price. (Cick the icon to view the standard and actuat intormation.) Reod the reovirements. Requirement 1. Compute the drect materials price and officency variances. Lefs begin by calculating the cost for the achal input at the budgeted price. Katharine Austen is the owner of Groovy Bikes, a company that produces high quality cross-country bicycles. Groov distributors, and elite bicycle shops. For several years Groovy Bikes has purchased titanium from suppliers in the su stronger and lighter than other metals and therefore increases the quality of the bicycle. Earlier this year, Groovy Bik purchasing manager. Michael believed that he could reduce costs if he purchased titanium from an online marketplac (Click the icon to view the standard and actual information.) Read the requirements. Requirement 1. Compute the direct materials price and efficiency variances. Let's begin by calculating the cost for the actual input at the budgeted price. duces high quality cross-country bicycles, Groovy Bikes participates in a supply chain that consists of suppliers, manufacturers, has purchased titanium from suppliers in the supply chain. Groovy Bikes uses titanium for the bicycle frames because it is huality of the bicycle. Earlier this year, Groovy Bikes hired Michael Gammaro, a recent graduate from State University, as f he purchased titanium from an online marketplace at a lower price. cy variances. dgeted price. ten is the owner of Groovy Bikes, a company that produces high quality cross-country bicycles. Groovy Bi Id elite bicycle shops. For several years Groovy Bikes has purchased titanium from suppliers in the supply ghter than other metals and therefore increases the quality of the bicycle. Earlier this year, Groovy Bikes h anager. Michael believed that he could reduce costs if he purchased titanium from an online marketplace at icon to view the standard and actual information Data table 1. Compute the Groovy Bikes established the following standards based upon the company's experience with their previous suppliers. The standards 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 Groovy Bikes? Explain why or why not. 4. Should Michael Gammaro'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 Austen 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 Groovy Bikes' decision to buy a lower quality of titanium from the online marketplace? Katharine Austen is the owner of Groovy Bikes, a company that produces high qualify cross-country bicycles. Groovy Bikes participates in a supply chain that consists of suppliers, manufacturers. distributors, and elite bicycle stops. For several years Groory Bikes has purchased titanium from suppliers in the supply chain. Groovy Bikes uses titarium for the bicycle frames because it is strenger and lighter than other metals and therefore increases the qualty of the bicycle. Eacler this year, Groovy Bikes hired Michael Gammaro, a recent graduate from State University, as purchasing manager. Michael believed that he could reduce costs if he purchased thanium from an onine marketplace at a lower price. (Cick the icon to view the standard and actuat intormation.) Reod the reovirements. Requirement 1. Compute the drect materials price and officency variances. Lefs begin by calculating the cost for the achal input at the budgeted price. Katharine Austen is the owner of Groovy Bikes, a company that produces high quality cross-country bicycles. Groov distributors, and elite bicycle shops. For several years Groovy Bikes has purchased titanium from suppliers in the su stronger and lighter than other metals and therefore increases the quality of the bicycle. Earlier this year, Groovy Bik purchasing manager. Michael believed that he could reduce costs if he purchased titanium from an online marketplac (Click the icon to view the standard and actual information.) Read the requirements. Requirement 1. Compute the direct materials price and efficiency variances. Let's begin by calculating the cost for the actual input at the budgeted price. duces high quality cross-country bicycles, Groovy Bikes participates in a supply chain that consists of suppliers, manufacturers, has purchased titanium from suppliers in the supply chain. Groovy Bikes uses titanium for the bicycle frames because it is huality of the bicycle. Earlier this year, Groovy Bikes hired Michael Gammaro, a recent graduate from State University, as f he purchased titanium from an online marketplace at a lower price. cy variances. dgeted price. ten is the owner of Groovy Bikes, a company that produces high quality cross-country bicycles. Groovy Bi Id elite bicycle shops. For several years Groovy Bikes has purchased titanium from suppliers in the supply ghter than other metals and therefore increases the quality of the bicycle. Earlier this year, Groovy Bikes h anager. Michael believed that he could reduce costs if he purchased titanium from an online marketplace at icon to view the standard and actual information Data table 1. Compute the Groovy Bikes established the following standards based upon the company's experience with their previous suppliers. The standards 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 Groovy Bikes? Explain why or why not. 4. Should Michael Gammaro'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 Austen 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 Groovy Bikes' decision to buy a lower quality of titanium from the online marketplace