Organa Co. has the following standards for one unit of Product C3PO: During July, Luke, the purchasing agent, found a competitive price on the raw material needed to produce the C3POs and bought 100,000 pounds at $3.15 per pound. In July the company produced 48,000C3PO s with the following inputs to production. Note: The $0.10 increase in lab t was due to a renegotiated labor contract not under the control of the production manager. The performance report for the purchasing department indicated: The performance report for the purchasing department indicated: The performance report for the production department indicated: Upon receiving the above performance report Han, the production manager, asked for a meeting with Chewie, the plant manager, to discuss the results of the period. Both Luke. Han and Chewie attended the meeting and the discussion went as follows: Han: "Luke's 'competitive price' material messed up my department's performance." Luke: "Don't blame me for the lack of control in your operation" Han: "LACK OF CONTROL! The material you bought is more difficult to handle than the one we regularly use and results in a higher level of waste in production of C3POs. With the regular material we have less than 1% of waste while with this new 'crap' you got us the waste rate is at least 5%." Luke: "Yeah, right! Now you are going to tell me unfavorable labor variances are my fault too." Han: "What part of 'the material is more difficult to handle' you didn't get. We had to incur overtime due to the delays caused by the material. And then there was the new labor contract, which is obviously not your fault." Luke: "Well, the department is out of control you have an unfavorable FOH Volume Variance." Han: "That means nothing, why don't you say anything about the FOH Spending Variance." Refer to Exhibit 3: Organa Co. Would you recommend going back to the old supplier or to give another try to the new supplier if the "competitive price" continues? Explain your answer and based it on the figures included on the performance report. Refer to Exhibit 3: Organa Co. Please briefly explain the validity of the arguments related to the FOH variances made by Luke and Han