Question 3 GRV is a chemical processing company that produces sprays used by farmers to protect their crops. One of these sprays is made by mixing three chemicals. The standard material cost details for 1 litre of this spray i; as follows: 0.4 litres of chemical A @ 30 per litre 12.00 0.3 litres of chemical B @ 20 per litre 6.00 0.5 litres of chemical C @ 15 per litre 7.50 Standard material cost of 1 litre of spray 25.50 During August, GRV produced 1,000 litres of this spray using the following chemicals: 600 litres of chemical A costing 18,000 250 litres of chemical B costing 8,000 500 litres of chemical C costing 8,500 You are the Management Accountant of E and the Production Manager has sent you the following e- mail: l was advised by our purchasing department that the worldwide price of chemical 3 had risen by 50%. As a result, i used an increased proportion of chemical A than is prescribed in the standard mix so that our costs were less affected by this price change. Question continues on next page Required 3) Calculate the following operational variances: l. direct material mix and (13 marks) ii. direct material yield (7 marks) b) Discuss the decision taken by the Production Manager. (5 marks) Cl If the performance of a divisional manager at SAG operates in many countries and has a diverse product offering. With such complex and broad operations, there are lnva ria bly many factors that can affect the performance of a business sector or division. In its 2019 Annual Report, SAG refers to its future trading strategy, called 'Vision 2020+', which aims to grant their individual businesses more entrepreneurial freedom and responsibility for their results. A key component of this strategy relates to sustainable company development, and it is reported that, as one element of determining the total remuneration payable to the Managing Board, sustainability is to be measured according to a bespoke SAG Sustainability Index which takes into account the following: 'three equally weighted key factors: C02 emissions (environmental), learning hours per employee (social) and Net Promoter Score (governance)'. Presumably, these (or very simila r) measures would also form part of the performance measurement system for divisional management. Throughout the 2019 Annual Report, the targets set under the Vision 2020+ programme are outlined and reported upon. For example, under the nancial heading, revenue growth is referred to as follows: 'Our primary measure for managing and controlling our revenue growth is comparable growth, because it shows the development in our business net of currency translation and port-folio effects.' Required I. SAG falls short of target due to external factors such as an economic recession, should the manager he held accountable? And why? (4 marks) ii. How might the actual assessment of divisional performance differ in recessionary times? (4 marks) [Total 33 marks)