The Medallion company manufactures medals for sports club awards. Its plant has a capacity to produce 20,000 medals per month. Current production and sales are 15,000 medals per month. The company normally sells the medals for $140 per medal. The cost information for the company is as follows: Variable costs that vary with number of units produced Total Direct materials $525,000 Total Direct labour 480,000 Other variable costs that vary with number of batches 150 batches of 50 medals per batch at $500 per batch Other costs include Fixed manufacturing cost $275,000 Fixed marketing cost 175,000 The Medallion company has received a Special order for 5000 medals at $90 per medal. This will have no effect on the company's regular business. For the special order the company would make 50 batches of 100 medals per batch. Required: (a)Should the Medal company accept the special order? Show calculations (b)Are there any other factors that should be considered? The Hornsby company has just started a business producing a cleaning compound, Cleanfast. The direct materials and direct labour standards for one unit of Cleanfast are given below: Standard Quantity/Hours Standard Price/Rate Direct materials 4.6 pounds $2.40 per pound Direct labour 0.2 hours $18.00 per hour During a recent month the following activity was recorded : (i) Twenty thousand of material were purchased at a cost of $46,400. (ii) Nineteen thousand pounds were used to produce 4,000 units of Cleanfast. (iii) 750 hours of direct labour time were recorded at a total labour cost of $14,925. Required: 1.Compute the material price and quantity variances for the month. 2.Compute the labour rate and efficiency variances for the month. 3. Why has the company calculated standard prices? 4. Provide two reasons for both the Material price variance and the Labour efficiency variance