TBN manufactures jumpers for retail stores. John, the accountant of TBN, gets concerned about TBNs standard costing system. The budgeted and actual amounts below for August 2019 were drawn from its standard costing system.

	Budgeted	Actual
Jumpers manufactured	4 000	4 488
Direct materials cost	20 000	20 196
Direct materials units used (rolls of cloth)	400	408
Direct manufacturing labour costs	18 000	18 462
Direct manufacturing labour hours	1 000	1020

There were no opening or closing stocks of materials.

John notes that there was hardly any unfavourable variance of any magnitude in the past six months. The standard costing system is based on a study of TBNs operations conducted by an independent consultant. John decides to unobtrusively observe the workforce at the plant himself. He notes that the workers seem to have a lot of time to discuss news, dramas and football.

At a recent industry conference that John attended, he learnt from another accountant that was employed by Company FTC. FTC also employed the same consultant to design a standard costing system. The consultant got dismissed after two weeks because FTC employees became aware of the consultant observing their work.

John participated in a seminar at the conference, where he met Sarah, an employee working for CONNECT, a data company. Sarah indicated that she could develop benchmark reports on the estimated costs of TBNs major competitors. She was examining the estimated costs of jumpers manufactured by three large companies, which had taken much business from TBN.

Required

a.	Calculate the price and efficiency variances of TBN for direct materials and direct manufacturing labour in August 2019. (8 marks)
b.	Comment on the types of action the employees at TBN may have taken to reduce the accuracy of the standards set by the independent consultant. Why would employees take those actions? Is this behaviour ethical? (8 marks)
c.	Describe how TBN might use information from CONNECT. (4 marks)