Medical Glasses (MGCo. hereafter manufactures a full line of well-known sunglasses. The MGCo use a standard costing system to set attainable standards for direct materials and labour. Direct material is made of two components: Frame and Lenses. The company also reviews and revises standards annually as necessary. Department managers, namely: the purchase manager, the production manager, the marketing manager and HR manager, whose evaluations and bonuses are affected by the department's performance, are held responsible to explain variances, whether they are favourable or unfavourable, in their department performance reports. The following table summarises the standards and actual results the (2019): Sales Static-Budget 7,800 Actual Results 7,300 Number of units sold Variable and Fixed manufacturing costs Static-Budget Actual Results Standard quantity of input Standard price Per unit Actual quantity of input Actual price Per unit 2 Direct materials-frames: per one sunglasses and in total frames $2.3 $4.6 $2.4 $9.6 grams grams Direct materials-lenses: per sunglasses and in total $3.1 $12.4 $3 $18 grams grams Direct manufacturing labour per sunglasses and in total $18 1.4 hour $14.2 $19.88 hour Additional information: Recently, the manufacturing variances have attracted the attention of the Chief Financial Officer (CFO) of MGCo. For no apparent reason some favourable/unfavourable variances have occurred. As the management accountant of MGCo. Sunglasses, the CFO has assigned you perform two tasks. In the first task, you will need to calculate the following variances: Part (2): Having handed over performance report, the CFO of MGCo. was confused about who should be made accountable for the (un)favourable variances. Each aforementioned department manager denies the responsibility of unfavourable variance and make claim for the favourable variances Therefore, the CFO is seeking your advice to specify who is responsible for unfavourable performance and who should be rewarded for favourable performance variances based on the additional information given below: Marketing manager did survey to address customers' satisfaction during the year. The result of this survey indicated to customers' dissatisfaction with the current quality of sunglasses. Such results have been escalated ONLY to purchase manager as a result of the less quality of current frames and lenses provided by the current supplier of MGCO. To solve aforementioned issue (a), the purchase manager has left the current supplier and moved to another one with higher quality. However, the new supplier forced the purchase manager of MGCo. to contract for both frames and lenses rather than choosing a specific component. Human resource manager was following to the above changes and communications amongst customers, marketing manager and purchase manager. Therefore, he seized this opportunity to contract for new labour as they claimed their experience with these new frames and lenses and they are paid less. The production manager was EXCLUDED from the above communication amongst customers, marketing manager, purchase managers nor new supplier. Further, the production manager has no control over price and quality of raw material components (frames and lenses). In addition, the production manager was struggling in managing new workers with low skills recruited by the Human Resources Manager on one hand and new frames and lenses supplied by new supplier on the other hand. Required: Specify who (marketing manager, procurement manager and production manager) should be rewarded or responsible for each of following variances and in why in few words: Material price variance for frames . Material efficiency variance for frames Material price variance for lenses . Material efficiency Variance for lenses Labour rate variance . Labour efficiency variance Additional information: Recently, the manufacturing variances have attracted the attention of the Chief Financial Officer (CFO) of MGCo. For no apparent reason some favourable/unfavourable variances have occurred. As the management accountant of MGCo. Sunglasses, the CFO has assigned you perform two tasks. In the first task, you will need to calculate the following variances: Part (1): Explain how Variance Analysis could assist the CEO to identify the true of managers' claims (denies) for favorable (unfavorable) performance? The CEO convinced with variance analysis as a tool could help to plan investigation by conducting in-depth investigation to understand where variance occurred. The CEO is seeking your help in finding out following variances for material and labour: Material price variance for frames Material efficiency variance for frames Material price variance for lenses Material efficiency Variance for lenses Labour rate variance Labour efficiency variance