Katharine Stanley is the owner of Action Bikes, a company that produces high quality cross-country bicycles Action Bikes participates in a supply chain that consists of su has purchased titanium from suppliers in the supply chain Action Bikes uses titanium for the bicycle frames because it is stronger and lighter than other metals and there a recent graduate from State University, as purchasing manager Michael believed that he could reduce costs if he purchased titanium from an online marketplace at a low 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 = $ $ Cost 84,600 75,600 Actual input X Budgeted price Direct materials purchases) 4.700 xs 18 Direct materials usage) 4200 Next determine the formula and calculate the cost for the flexible budget Budgeted input for actual output Direct materials 3.200 Budgeted price Flexible budget cost $ 57,600 = Now compute the price and efficiency variances for direct materials. Label each variance as favorable (F) or unfavorable (U). Price Efficiency variances Variances Derect materials Choose from any list or enter any number in the input fields and then click Check Answer. b parts remaining Clear All O Type here to search 0 K P 009 ] W any that produces high quality cross-country bicycles. Action Bikes participates in a supply chain that consists of suppliers, manufacturers, d. ain. Action Bikes uses titanium for the bicycle frames because it is stronger and lighter than other metals and therefore increases the quality manager, Michael believed that he could reduce costs if he purchased titanium from an online marketplace at a lower price. rmation.) Requirements nd efficiency variances at the budgeted price. 2 = * Budgeted price - XS 18 XS 18 III the flexible budget 1. Compute the direct materials price and efficiency variances What factors can explain the variances identified in requirement 12 Could any other variances be affected? 3. Was switching suppliers a good idea for Action Bikes? Explain why or why not Should Michael Sesnie'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 Stanley 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? ctual output X Budg direct materials. Label each varig Efficiency variances Print Done e input fields and then click Check Answer Clear All i Data Table x x 25 Action Bikes established the following standards based upon the company's experience with their previous suppliers. The standards are as follows: Ice Cost of titanium $ 18 per pound 8 lbs. Titanium used per bicycle Actual results for the first month using the online supplier of titanium are as follows: Budg 400 Bicycles produced Titanium purchased Titanium used in production I each vari 4.700 lb. for $75,200 4,200 lb Print Done click Check Answer. Conra
