Question 27 2. Chapter 10 Ikaea Manufacturing builds cherry dining room tables using skilled craftsmen. The company uses a standard cont stem During the most recent three months, the purchasing department found Brazilian cherry to be cheaper than North America (domestic) cherry and began to purchase the imported lumber. Brazilian cherry is equally suitable but because it is harder domestic, takes longer to shape and sand. What effect would you expect to observe in the standard cost variances are this change? An unfavorable materials quantity variance and a favorable materials price variance A favorable materials price variance and a favorable labor efficiency variance A favorable materials price variance and no effect on other variances. A favorable materials price variance and an unfavorable labor efficiency variance Previous Chapter 6: Showalter Corporation currently has two divisions which had the following operating results for last year Division A Division B Sales $ 500.000 $ 650.000 Variable costs 230.000 425.000 Contribution margin 270,000 225,000 Traceable fixed costs 145.000 150.000 Segment margin 125,000 75,000 Allocated common corporate fixed costs 80.000 90.000 Net operating income (loss) $ 45,000 $ (15.000) Management is considering the elimination of Division B. If the division was dropped, all of the traceable fixed ce avoided, but none of the allocated common corporate fixed costs could be avoided. If Division B was dropped a of last year, how much higher or lower would Showalter's total net operating income have been? $90,000 lower O $15,000 higher $90,000 higher O $75,000 lower