Standard Costing. Planned Variances Phono Company manufactures a plastic toy cell phone. The following standards have been established for the toy's materials and labor inputs: During the first week of July, the company had the following results: serib The purchauing agent located a new source of slightly higher-qualhy plastic, and this material was used during the first week in July, Also, a new manufacturing layout was implemented on a trial basis. The new layout required a slightly higher level of skilled labor. The higher-quality materiat has no effect on labor utilzation, S.milarly, the new manufocturing approoch has no effect on material usage. (Note: hound all variances to the nearest doliar.) Required: 1. Conceptual Connection: Compute the materiais price and usage variances. Assuming that the materials variances are essentialy attributable to the higher quality of materials, would you recommend that the purchasing agent continue to buy this quality, or should the usual quality be purchased Assume that the quality of the end product is not atfected significantly. 1. Conceptual Connection: Compute the materiais price and usage variances. Assuming that the materials variances are essentially attributable to the higher quality of materials, would you recornmend that the purchasing agent continue to buy this quality, of should the usual quality be purchased? Assume that the quality of the end product is not affected significanthy. 2. Conceptual Coanection: Compute the labor rate and efficiency variances. Assuming that the labor variances are attributable to the new manufacturing layout, should it be continued or discontinued? 3. Conceptual Connection: Refer to Requirement 2. 5uppose that the industrial engineer argued that the new layout should not be evaluated after only one week. His reasoning was that it would take at least a week for the workers to become efficient with the new approach. Suppose that the production is the same the second week and that the actual labor hours were 13,200 and the labor cost was 5132,000 . If there is no variance, enter " 0 " and select "No variance" from the dropdown. Should the new larout be adopted? Assume the variances are attributable to the new layout. If so, what would be the projected annual savings